uary 12, 2009 Ober 17, 2010 | 15, 2011 28 2011

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
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An investment has the following cash flows:
August 21, 2008
February 12, 2009
October 17, 2010
April 15, 2011
May 28, 2012
July 19, 2013
November 22, 2014
August 21, 2015
C.
$ -700
$ +300
$ +400
$ +600
$ +300
$ +400
$ +200
$ -1800
a.
Calculate the Net Present Value of this investment. Assume the annual discount rate is 15%.
b. Create a data table and graph illustrating the impact of the discount rate on the Net Present
Value of this investment. Include a title and label the axes for the graph.
Use Solver to determine the Internal Rate of Return(s) associated with this investment.
Transcribed Image Text:An investment has the following cash flows: August 21, 2008 February 12, 2009 October 17, 2010 April 15, 2011 May 28, 2012 July 19, 2013 November 22, 2014 August 21, 2015 C. $ -700 $ +300 $ +400 $ +600 $ +300 $ +400 $ +200 $ -1800 a. Calculate the Net Present Value of this investment. Assume the annual discount rate is 15%. b. Create a data table and graph illustrating the impact of the discount rate on the Net Present Value of this investment. Include a title and label the axes for the graph. Use Solver to determine the Internal Rate of Return(s) associated with this investment.
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