For the net cash flow series shown, (a) apply the two rules of sign change, (b) find the external rate of return using the ROIC method at an investment rate of 15% per year, and (c) determine an i* using the IRR function with and without the ROIC determined in part (b). Year Net Cash Flow, $ 0 +48,000 1 +20,000 2 −90,000 3 +50,000 4 −10,000
For the net cash flow series shown, (a) apply the two rules of sign change, (b) find the external rate of return using the ROIC method at an investment rate of 15% per year, and (c) determine an i* using the IRR function with and without the ROIC determined in part (b). Year Net Cash Flow, $ 0 +48,000 1 +20,000 2 −90,000 3 +50,000 4 −10,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
For the net cash flow series shown, (a) apply the
two rules of sign change, (b) find the external
of return
rate of 15% per year, and (c) determine an i* using
the
in part (b).
Year Net Cash Flow, $
0 +48,000
1 +20,000
2 −90,000
3 +50,000
4 −10,000
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