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A certain entrepreneur opened a fashion boutique which experienced the cash flows shown in the table below. She closed the boutique after four years due
A certain entrepreneur opened a fashion boutique which experienced the cash flows shown in the table below. She closed the boutique after four years due to falling revenues. (a) How many possible rates of return are there for these cash flows? (b) Find all the actual rate of return values between 0% and 100%. (c) If the entrepreneurs minimum acceptable rate of return is 20% per year, was this a good investment?
YEAR | COSTS | REVENUES |
0 | 75000 | 0 |
1 | 49500 | 42000 |
2 | 67500 | 210000 |
3 | 90000 | 57000 |
4 | 45000 | 60000 |
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