If all the negative cash flows are moved to year 0. If the minimum attractive interest rate for the company is 10%, calculate what the temporary fund’s interest rate (annual effective) will have to be. (i.e. what fund interest rate makes the overall project have an IRR of 10%) Time Cash Flow A Year 0 $-4000 Year 1 $-2000 Year 2 $2000 Year 3 $400 Year 4 $8000 Year 5 $-2000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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If all the negative cash flows are moved to year 0. If the minimum attractive interest rate for the company is 10%, calculate what the temporary fund’s interest rate (annual effective) will have to be. (i.e. what fund interest rate makes the overall project have an IRR of 10%)

Time Cash Flow A
Year 0 $-4000
Year 1 $-2000
Year 2 $2000
Year 3 $400
Year 4 $8000
Year 5 $-2000
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