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 using the IRR function with and without the ROIC determined in part (bj Net Cash Flow, $ 48,000 20,000 Year 3. 2. 3. -90.000 50.000 -10.000 6. rate of return values According to the rule of signs, there can be up to three According to the cumulative cash flow test, the value is inconclusive The externel rate of return according to the ROIC method is 23 55

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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For the net cash flow serles 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 yeat, and (c) determine an using the IRR function with and without the ROIC determined in part (b).
B.
Net Cash Flow, $
48,000
20,000
A
Year
3.
-90.000
50,000
4
12.
4.
-10,000
rate of return values
According to the rule of signs, there can be up to three
According to the cumulative cash flow test, the "value is inconclusive
%.
The external rate of return according to the ROIC method is 23 55
-27
%.
The rate of return using the IRR function is
Transcribed Image Text:For the net cash flow serles 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 yeat, and (c) determine an using the IRR function with and without the ROIC determined in part (b). B. Net Cash Flow, $ 48,000 20,000 A Year 3. -90.000 50,000 4 12. 4. -10,000 rate of return values According to the rule of signs, there can be up to three According to the cumulative cash flow test, the "value is inconclusive %. The external rate of return according to the ROIC method is 23 55 -27 %. The rate of return using the IRR function is
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