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Brandon buys a piece of equipment for $15,000. He pays $5,000 for upgrades in year 1 and the equipment generates $2,000 in cash flow for year 1. In year 2 the equipment generates $8,000, year 3 it generates $4,000, but Brandon sells it for $6,000 but also pays a $500 commission. What is his IRR? a. -1.18%. b. +1.18%. c. -0.8%. d. +0.8%. Same facts as the above question except: Assume a required rate of return of 8%. What is the NPV? a. <3,378>. b. 3,378. c. <2,178>. d. 2,178.

Brandon buys a piece of equipment for $15,000. He pays $5,000 for upgrades in year 1 and the equipment generates $2,000 in cash flow for year 1. In year 2 the equipment generates $8,000, year 3 it generates $4,000, but Brandon sells it for $6,000 but also pays a $500 commission. What is his IRR? a. -1.18%. b. +1.18%. c. -0.8%. d. +0.8%. Same facts as the above question except: Assume a required rate of return of 8%. What is the NPV? a. <3,378>. b. 3,378. c. <2,178>. d. 2,178.

Essentials Of Investments
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
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Brandon buys a piece of equipment for $15,000. He pays $5,000 for upgrades in year 1 and the equipment generates $2,000 in cash flow for year 1. In year 2 the equipment generates $8,000, year 3 it generates $4,000, but Brandon sells it for $6,000 but also pays a $500 commission. What is his IRR?
a. -1.18%.
b. +1.18%.
c. -0.8%.
d. +0.8%.

Same facts as the above question except: Assume a required rate of return of 8%. What is the NPV?
a. <3,378>.
b. 3,378.
c. <2,178>.
d. 2,178.

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