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41) You must decide whether to purchase the film noir classic The Big Sleep. The initial investment to purchase the film and the cash flows
41) You must decide whether to purchase the film noir classic The Big Sleep. The initial investment to purchase the film and the cash flows it is forecast to generate are shown in the table below. The cash flows are in millions. Beyond year 5, the film is expected to earn a cash flow of $200,000 perpetually. What is the Internal Rate of Return or return that would be earned if the forecast is accurate? Round the answer to one one-hundredth of a percent i.e. - 1 basis point.
Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
Cash Flows | ($16.80) | $7.50 | $6.30 | $4.20 | $2.20 | $1.60 | $0.20 |
Rate of Return:
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