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Compute the rate of return for the following cash flows: Year Cash Flow 1-5 $2,643 6-10 $28,942 Question 2 - You want to have $802,219

Compute the rate of return for the following cash flows:

YearCash Flow
1-5$2,643
6-10$28,942


Question 2 -You want to have $802,219 at age 52 when you plan to retire. If you invest $33,057 at age 34, what Rate of Return must you receive to achieve your goal?

Question 3 -A monument's annual maintenance cost is estimated to be $1,002. If a $58,806 fund is set up to pay for this maintenance, what interest rate must the fund earn to pay for care indefinitely if interest is compounded quarterly?

Question 4 -Last year a town spent $24,062 to purchase water from an aqueduct. What would be the rate of return if they spent $135,403 to dig a well that lasts indefinitely (i.e. forever)?

Question 5 -What is the rate of return for the following incremental analysis?

Investment

1

2

Initial Investment

$78,052

$85,947

Annual Return

$5,653

$10,695

Salvage Value

$78,052

$85,947

 

 

 

 

 

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Answer 1 To compute the rate of return we need to first find the total cash inflow from the investment and then use the formula for rate of return The total cash inflow can be calculated by adding the ... blur-text-image

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