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The following information are provided concerning a future investment. The investment is $142 950, the net annual cash inflow is $37 500, the estimated life
The following information are provided concerning a future investment. The investment is $142 950, the net annual cash inflow is $37 500, the estimated life of the equipment is 7 years. (Each question is independent) 1) Compute the IRR of the project, prove your answer by computing the NPV of the project using the IRR rate. 2) If the required rate of return is 14%, compute the annual cash inflow that would provide this return on the $142 950 investment. 3) Compute the IRR if the life of the equipment was 5 years, 9 years, comment on your finding. 4) If the standard deviation of the net annual cash inflows is plus or minus 20%. Compute the IRR under both scenarios. 5) Assume that $30 000 per year is achieved and that at the end of 5 years the equipment is sold for $61 375, compute the IRR. The following information are provided concerning a future investment. The investment is $142 950, the net annual cash inflow is $37 500, the estimated life of the equipment is 7 years. (Each question is independent) 1) Compute the IRR of the project, prove your answer by computing the NPV of the project using the IRR rate. 2) If the required rate of return is 14%, compute the annual cash inflow that would provide this return on the $142 950 investment. 3) Compute the IRR if the life of the equipment was 5 years, 9 years, comment on your finding. 4) If the standard deviation of the net annual cash inflows is plus or minus 20%. Compute the IRR under both scenarios. 5) Assume that $30 000 per year is achieved and that at the end of 5 years the equipment is sold for $61 375, compute the IRR
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