Question
Mikkelson Corp makes an investment of $14,400 that provides the following cash flow: Year Cash Flow 1................ $ 7,000 2................ 7,000 3................ 4,000 a .
Mikkelson Corp makes an investment of $14,400 that provides the following cash flow:
| Year | Cash Flow |
| 1................ | $ 7,000 |
| 2................ | 7,000 |
| 3................ | 4,000 |
a. What is the net present value at an 11 percent discount rate?
b. What is the internal rate of return? Use the interpolation procedure.
c. In this problem would you make the same decision under both parts a and b?
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Financial Institutions Management
Authors: Anthony Saunders
3rd Edition
007303259X, 978-0073032597
