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Consider the series of cash flows in the prior problem. Can you find the discount rate that makes the NPV of the cash flows equal
Consider the series of cash flows in the prior problem. Can you find the discount rate that makes the NPV of the cash flows equal of $7,500 ? Hint 1: Consider the formula that you would write to compute the NPV of the cash flows as given, this this formula be FNPV; write this formula using r for the unknown rate. Write the equality FNPV =$7,500, then "move" the $7,500 to the LHS of the equation to get FNPV 7,500=0. Combine the $7,500 term with the term from FNPV to which is is closest to in timing. Use the resulting equation to determine r. Hint 2: You should follow hint 1 to understand the logic of the solution, but once you understand what you need to do, you can use the calculator to solve the problem. Use at least 5 decimals precision in all your calculations and enter the answer below in percentages (i.e. 5 for five percent, not as 5% )
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