4. (7 Marks) ROVNO Ltd. just invested $65,000 into a new local network. Services provided by...
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4. (7 Marks) ROVNO Ltd. just invested $65,000 into a new local network. Services provided by the network will bring $27,000 per year in the next five years. The following information is given: - Current MARR = 11% - expected annual inflation = 3.5% - the network will be sold for salvage after five years; its depreciation rate is 20% (Declining Balance) All Cashflow values, including salvage, are in real dollars Is this a good investment in terms of the internal rate of return? 4. (7 Marks) ROVNO Ltd. just invested $65,000 into a new local network. Services provided by the network will bring $27,000 per year in the next five years. The following information is given: - Current MARR = 11% - expected annual inflation = 3.5% - the network will be sold for salvage after five years; its depreciation rate is 20% (Declining Balance) All Cashflow values, including salvage, are in real dollars Is this a good investment in terms of the internal rate of return?
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