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Assume the following cash flow steam: Cash flow is $100,000 at the end of year 1, $120,000 at end of year 2, $50,000 end
Assume the following cash flow steam: Cash flow is $100,000 at the end of year 1, $120,000 at end of year 2, $50,000 end of year 3, $300,000 end of year 4, $20,000 end of year 5 and $200,000 end of year 6. a. How much should I pay for the cash flow stream to receive a 20% return on my investment? b. What would the multiple on this investment be? c. What would my ROI be for year 3, based on what I decided to pay for the cash flow stream? 10. If I only paid $300,000 for the cash flow stream in the previous question, a. What would my IRR (internal rate of return) be on my investment? b. What would the multiple on my investment be? c. What would my ROI in year 3 be? d. What would my payback period be?
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