Q4A. Calculate the future value of the positive cash flows, provided below, using the appropriate interest rate (i.e. the first step of the ERR). Assume the company has a MARR of 10% and a reinvestment rate of 12%. Year 2 3 Positive Net Cash Flows $156,054 $182,611 $214,376 4B. Calculate the future value of the negative cash flows/initial investment given a MARR of 10.3% per year (i.e. the second step of the ERR). 4C. Assume the future value of the positive cash flows, using the appropriate interest rate, is $548,356. Calculate the external rate of return. (note: if your answer is 10.25%, enter "10.25").
Q4A. Calculate the future value of the positive cash flows, provided below, using the appropriate interest rate (i.e. the first step of the ERR). Assume the company has a MARR of 10% and a reinvestment rate of 12%. Year 2 3 Positive Net Cash Flows $156,054 $182,611 $214,376 4B. Calculate the future value of the negative cash flows/initial investment given a MARR of 10.3% per year (i.e. the second step of the ERR). 4C. Assume the future value of the positive cash flows, using the appropriate interest rate, is $548,356. Calculate the external rate of return. (note: if your answer is 10.25%, enter "10.25").
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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