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For the net cash flow series shown, (a) apply the two rules of sign change, (b) find the external rate of return using the ROIC
For the net cash flow series shown, (a) apply the two rules of sign change, (b) find the external rate of return using the ROIC method at an investment rate of 15% per year, and (c) determine an i* using the IRR function with and without the ROIC determined in part (b). 1 2 3 4 5 6 Year 0 1 2 3 4 B Net Cash Flow, $ 48,000 20,000 -90,000 50,000 -10,000 According to the rule of signs, there can be up to three rate of return values. According to the cumulative cash flow test, the i* value is inconclusive The external rate of return according to the ROIC method is %. The rate of return using the IRR function is -27%
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