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Suppose you are offered $8,000 today but must make the following payments: Year Cash Flows ($) 0 $ 8,000 1 4,300 2 3,000 3 2,100
Suppose you are offered $8,000 today but must make the following payments: |
Year | Cash Flows ($) | ||
0 | $ 8,000 | ||
1 | 4,300 | ||
2 | 3,000 | ||
3 | 2,100 | ||
4 | 1,300 | ||
a. | What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
b. | If the appropriate discount rate is 13 percent, should you accept this offer? |
|
c. | If the appropriate discount rate is 20 percent, should you accept this offer? |
|
d-1. | What is the NPV of the offer if the appropriate discount rate is 13 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
d-2. | What is the NPV of the offer if the appropriate discount rate is 20 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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