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17. From the following cash flow diagram: 2M ALL 400K years 16 400K years 1-10 T iz? i = ? a. (10 points) Write out
17. From the following cash flow diagram: 2M ALL 400K years 16 400K years 1-10 T iz? i = ? a. (10 points) Write out (do not solve the 0 = PWDisbursements +PWReceipts equation that could be used to find the actual i* by trial and error. b. (15 points) Calculate the simple interest Rate of Return. Do this by assuming all the cash receipts occur at the end of the project life and subtract them from the single disbursement at year zero. Solve for the simple interest value that yields the net amount after 10 interest periods. Show your work, and clearly indicate the i* value. C. (5 points) Will i* calculate in part 6. be greater than or less than the actual i* value
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