Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results: Assume MARR is 20 percent per year. Based on an internal rate of return analysis, (1) determine the investment's worth, (2) state whether or not your results indicate the investment should be undertaken, and (3) state the decision rule you used to arrive at this conclusion.
Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results: Assume MARR is 20 percent per year. Based on an internal rate of return analysis, (1) determine the investment's worth, (2) state whether or not your results indicate the investment should be undertaken, and (3) state the decision rule you used to arrive at this conclusion.
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:13. Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results:
Assume MARR is 20 percent per year. Based on an internal rate of return analysis, (1) determine the investment's
worth, (2) state whether or not your results indicate the investment should be undertaken, and (3) state the decision
rule you used to arrive at this conclusion.
WILEY O
382 CHAPTER 8 / RATE OF RETURN ANALYSIS
EOY
Cash Flow
EOY
Cash Flow
ΕΟΥ
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
$15,000
13
$8,000
20
$1,000
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