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EOY Cash Flow EOY Cash Flow EOY Cash Flow -$70,000 7 14,000 14 7,000 1 20,000 8 13,000 15 6,000 2 19,000 9 12,000 16 5,000 3 18,000 10 11,000 17 4,000 4 17,000 11 10,000 18 3,000 5 16,000 12 9,000 19 2,000 6 15,000 13 8,000 20 1,000

EOY Cash Flow EOY Cash Flow EOY Cash Flow -$70,000 7 14,000 14 7,000 1 20,000 8 13,000 15 6,000 2 19,000 9 12,000 16 5,000 3 18,000 10 11,000 17 4,000 4 17,000 11 10,000 18 3,000 5 16,000 12 9,000 19 2,000 6 15,000 13 8,000 20 1,000

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
Problem 1PS
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Nu Things, Inc., is considering an investment in a business venture with the following anticipated cash flow results: Assume MARR is 20% per year. Based on an external rate of return analysis (1) determine the investment’s worth; (2) state whether or not your results indicate the investment should be under taken; and (3) state the decision rule you used to arrive at this conclusion.

EOY Cash Flow EOY Cash Flow EOY Cash Flow -$70,000 7 14,000 14 7,000 1 20,000 8 13,000 15 6,000 2 19,000 9 12,000 16 5,000 3 18,000 10 11,000 17 4,000 4 17,000 11 10,000 18 3,000 5 16,000 12 9,000 19 2,000 6 15,000 13 8,000 20 1,000
Transcribed Image Text:EOY Cash Flow EOY Cash Flow EOY Cash Flow -$70,000 7 14,000 14 7,000 1 20,000 8 13,000 15 6,000 2 19,000 9 12,000 16 5,000 3 18,000 10 11,000 17 4,000 4 17,000 11 10,000 18 3,000 5 16,000 12 9,000 19 2,000 6 15,000 13 8,000 20 1,000
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