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The IRR on the Market is :

The IRR on the Market is :

Essentials Of Investments
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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QUESTION 11 Suppose you derived the following information on the Private cash flows of a farming project. Year 0 1 2 3 4 5 Market Cash Flow Before Financing -3500 1000 1000 1000 1000 1000 Debt Financing 3000 -750 -750 -750 -750 -750 Private Net Benefit After Financing -500 250 250 250 250 250 If the debt-to-equity ratio is 40:60, complete the following: The IRR on the Market is : The IRR on the Debt is: The IRR on Equity is: Provide your answers in percentage form (e.g. an interest of 5.2% should be entered as 5.20) to two decimal places. Do not include %. Marks will not be awarded if your answer is not to the correct two decimal places. Ensure you double check your Excel output to report as 2dp.
Transcribed Image Text:QUESTION 11 Suppose you derived the following information on the Private cash flows of a farming project. Year 0 1 2 3 4 5 Market Cash Flow Before Financing -3500 1000 1000 1000 1000 1000 Debt Financing 3000 -750 -750 -750 -750 -750 Private Net Benefit After Financing -500 250 250 250 250 250 If the debt-to-equity ratio is 40:60, complete the following: The IRR on the Market is : The IRR on the Debt is: The IRR on Equity is: Provide your answers in percentage form (e.g. an interest of 5.2% should be entered as 5.20) to two decimal places. Do not include %. Marks will not be awarded if your answer is not to the correct two decimal places. Ensure you double check your Excel output to report as 2dp.
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