Question
A large stake in an Alpacca farming business can be purchased for $48,260. The Alpacca farm is expected to return $2,000 in perpetuity per quarter
A large stake in an Alpacca farming business can be purchased for $48,260. The Alpacca farm is expected to return $2,000 in perpetuity per quarter in arrears. The required rate of return on investments of this risk is j4 = 18%.
a)What is the investment's net present value? Give your answer in dollars and cents to the nearest cent.
NPV = $
b)What is the internal rate of return (IRR)? Give your answer as a nominal percentage per annum to 3 decimal places.
IRR = % pa
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Modern Auditing
Authors: Graham W. Cosserat, Neil Rodda
3rd Edition
0470319739, 9780470319734
