family business has the cash flow series has presented below. Year 1 2 Revenues ($) Costs ($) 30,500 24,500 9500 33,500 -6000 -35500 -12500 -11500 -17500 etermine the following: a) What conclusions can you draw from the Descart and Norstrom tests applied to the cash flow of the family business? b) Numerically calculate the external rate of return using the Modified ROR (MIRR) method if i = 18% per year and in = 10% per year. %3D c) The external rate of return using the Return on Invested Capital (ROIC) method if i = 18%.
family business has the cash flow series has presented below. Year 1 2 Revenues ($) Costs ($) 30,500 24,500 9500 33,500 -6000 -35500 -12500 -11500 -17500 etermine the following: a) What conclusions can you draw from the Descart and Norstrom tests applied to the cash flow of the family business? b) Numerically calculate the external rate of return using the Modified ROR (MIRR) method if i = 18% per year and in = 10% per year. %3D c) The external rate of return using the Return on Invested Capital (ROIC) method if i = 18%.
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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Transcribed Image Text:family business has the cash flow series has presented below.
Year
1
2
3
4
Revenues ($)
30,500 24,500
9500
33,500
Costs ($)
-6000
-35500
-12500
-11500
-17500
etermine the following:
a) What conclusions can you draw from the Descart and Norstrom tests applied to
the cash flow of the family business?
b) Numerically calculate the external rate of return using the Modified ROR (MIRR)
method if i
per year and i,
per year.
c) The external rate of return using the Return on Invested Capital (ROIC) method
if iį = 18%.
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