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Suppose you are offered $7,300 today but must make the following payments: Year Cash Flows ($) 0 $ 7,300 1 4,000 2 2,700 3 1,800

Suppose you are offered $7,300 today but must make the following payments:

Year Cash Flows ($)
0 $ 7,300
1 4,000
2 2,700
3 1,800
4 1,200

a. What is the IRR of this offer? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

IRR %

b. If the appropriate discount rate is 10 percent, should you accept this offer?
  • Reject

  • Accept

c. If the appropriate discount rate is 22 percent, should you accept this offer?
  • Reject

  • Accept

d-1.

What is the NPV of the offer if the appropriate discount rate is 10 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

NPV $

d-2.

What is the NPV of the offer if the appropriate discount rate is 22 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

NPV $

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