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ANSWER THE FOLLOWING QUESTIONS In July of 2012, Taylor purchased 2,000 shares of XYZ common stock for $75,000. He then sold 1,000 shares of XYZ
ANSWER THE FOLLOWING QUESTIONS
In July of 2012, Taylor purchased 2,000 shares of XYZ common stock for $75,000. He then sold 1,000 shares of XYZ in July of 2013 for $39 per share. The remaining 1,000 shares were finally sold for $50 per share in July 2014. (Problem 1 and 3) a. Draw a cash-flow diagram of this situation. b. What was Taylor's internal rate of return (IRR) on this investment? c. What was the ERR on this investment if the external reinvestment rate is 8% per year
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