An investment with an initial cost of $6,000 produces cash flows of 3,000, −$500, -$2,800, −$100, and $6,000 for Years 1 to 5, respectively. How many IRRs does this project have? Why? Several years ago, Ali invested $10,000. Today, that investment is worth $28,000 and has earned an average annual rate of return of 7.25%. How long ago did Sara make her investment? Show your calculation mathematically!
An investment with an initial cost of $6,000 produces cash flows of 3,000, −$500, -$2,800, −$100, and $6,000 for Years 1 to 5, respectively. How many IRRs does this project have? Why? Several years ago, Ali invested $10,000. Today, that investment is worth $28,000 and has earned an average annual rate of return of 7.25%. How long ago did Sara make her investment? Show your calculation mathematically!
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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- An investment with an initial cost of $6,000 produces cash flows of 3,000, −$500,
-$2,800, −$100, and $6,000 for Years 1 to 5, respectively. How many
- Several years ago, Ali invested $10,000. Today, that investment is worth $28,000 and has earned an average annual
rate of return of 7.25%. How long ago did Sara make her investment? Show your calculation mathematically!
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