Question
A firm invested $15,000 in a project that appeared to have excellent potential. Unfortunately, there was a lengthy labor dispute in Year 3 which cost
A firm invested $15,000 in a project that appeared to have excellent potential. Unfortunately, there was a lengthy labor dispute in Year 3 which cost the company. The cash flows are as shown below:
| Year | Cash Flow |
| 0 | -15,000 |
| 1 | 10,000 |
| 2 | 6,000 |
| 3 | -8,000 |
| 4 | 4,000 |
| 5 | 4,000 |
| 6 | 4,000 |
What is the number of sign changes in the cash flows?
What is the minimum number of roots in the cash flows?
Assuming an ERR of 12%, what is the IRR for the project?
Please answer all 3 questions.
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Trends In Managerial And Financial Accounting Volume 1
Authors: Cees Van Dam
1978 Edition
9020706934, 978-9020706932
