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The United Printing Company, Inc. is considering buying a new web press. It will cost a total of $ 7 M to completely install the

The United Printing Company, Inc. is considering buying a new web press. It will cost a total of $7 M to completely install the machine. The first year they had a net cash flow of $17 M. The next year the net was $6 M. Because of industry problems, they had to add more equipment in each of the next two year at a net cost and again had positive cash flow for years 5 and 6. Here is a chart of the cash flows.Question Statement:
The United Printing Company, Inc. is considering buying a new web press. It will cost a total of $7M to completely install the machine.
The first year they had a net cash flow of $17M. The next year the net was $6M. Because of industry problems, they had to add more
equipment in each of the next two year at a net cost and again had positive cash flow for years 5 and 6. Here is a chart of the cash
flows.
How many possible rates of return could this data have?
Estimate the possible rates of return between 0% and 90% using a chart in a spreadsheet such as Excel.
a. Number of possible rates of return: 0 none
b. Number of possible rates of return: 3 Possible RORs: 10%,40%, and 82.5%
c. Number of possible rates of return: 3 Possible RORs: 89%
d. Number of possible rates of return: 2 Possible RORs: 4% and 47%.
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