A project has an initial cost of $50 000, net annual cash inflows of $20 000, and a $2 000 salvage value after five years. Which of the following gives the project's approximate external rate of return (i*) if MARR = 10%? -50 000(P/F, i*, 5) +20 000(P/A, i*, 5) + 2 000(F/P, i*, 5) = 0 -50 000(F/P, i*, 5) + 20 000(F/A, i*, 5) + 2 000 = 0 -50 000(F/P, i*, 5) + 20 000(F/A, 10, 5) + 2 000 = 0 O-50 000(F/P, i*, 5) + 20 000(P/A, i*, 5) + 2 000 = 0
A project has an initial cost of $50 000, net annual cash inflows of $20 000, and a $2 000 salvage value after five years. Which of the following gives the project's approximate external rate of return (i*) if MARR = 10%? -50 000(P/F, i*, 5) +20 000(P/A, i*, 5) + 2 000(F/P, i*, 5) = 0 -50 000(F/P, i*, 5) + 20 000(F/A, i*, 5) + 2 000 = 0 -50 000(F/P, i*, 5) + 20 000(F/A, 10, 5) + 2 000 = 0 O-50 000(F/P, i*, 5) + 20 000(P/A, i*, 5) + 2 000 = 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A project has an initial cost of $50 000, net annual cash inflows of $20
000, and a $2 000 salvage value after five years. Which of the following
gives the project's approximate external rate of return (i*) if MARR =
10%?
-50 000(P/F, i*, 5) + 20 000(P/A, i*, 5) + 2 000(F/P, i*, 5) = 0
-50 000(F/P, i*, 5) + 20 000(F/A, i*, 5) + 2 000 = 0
-50 000(F/P, i*, 5) + 20 000(F/A, 10, 5) + 2 000 = 0
-50 000(F/P, i*, 5) + 20 000(P/A, i*, 5) + 2 000 = 0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffc4b33cb-db9c-4c04-ab11-b1e9878be526%2F7f708a79-924d-4b97-afbd-5a3360092165%2Fqa3ltlt_processed.png&w=3840&q=75)
Transcribed Image Text:A project has an initial cost of $50 000, net annual cash inflows of $20
000, and a $2 000 salvage value after five years. Which of the following
gives the project's approximate external rate of return (i*) if MARR =
10%?
-50 000(P/F, i*, 5) + 20 000(P/A, i*, 5) + 2 000(F/P, i*, 5) = 0
-50 000(F/P, i*, 5) + 20 000(F/A, i*, 5) + 2 000 = 0
-50 000(F/P, i*, 5) + 20 000(F/A, 10, 5) + 2 000 = 0
-50 000(F/P, i*, 5) + 20 000(P/A, i*, 5) + 2 000 = 0
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