You are evaluating five different investments, all of which involve an upfront outlay of cash. Each investment will provide a single cash payment back to you in the future. Details of each investment appears here: 2. Calculate the IRR of each investment. State your answer to the nearest basis point (i.e., the nearest 1/100th of 1%, such as 3.76%). Review Only Click the icon to see the Worked Solution (Calculator Use). Click the icon to see the Worked Solution (Spreadsheet Use). The yield for investment A is %. (Round to two decimal places.) The yield for investment B is %. (Round to two decimal places.) The yield for investment C is %. (Round to two decimal places.) The yield for investment D is %. (Round to two decimal places.) The yield for investment E is %. (Round to two decimal places.) 2: Data Table Initial Future End of Investment Investment Value Year A $1,800 $6,387 14 B $9,500 $14,353 11 $600 $3,091 17 D $3,500 $4,505 3 E $5,800 $12,092 12 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
You are evaluating five different investments, all of which involve an upfront outlay of cash. Each investment will provide a single cash payment back to you in the future. Details of each investment appears here: 2. Calculate the IRR of each investment. State your answer to the nearest basis point (i.e., the nearest 1/100th of 1%, such as 3.76%). Review Only Click the icon to see the Worked Solution (Calculator Use). Click the icon to see the Worked Solution (Spreadsheet Use). The yield for investment A is %. (Round to two decimal places.) The yield for investment B is %. (Round to two decimal places.) The yield for investment C is %. (Round to two decimal places.) The yield for investment D is %. (Round to two decimal places.) The yield for investment E is %. (Round to two decimal places.) 2: Data Table Initial Future End of Investment Investment Value Year A $1,800 $6,387 14 B $9,500 $14,353 11 $600 $3,091 17 D $3,500 $4,505 3 E $5,800 $12,092 12 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
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:**Investment Evaluation Exercise**
You are tasked with evaluating five different investments, each requiring an initial outlay of cash. Each investment results in a single cash payment in the future. The details for each investment are outlined below. Your objective is to calculate the Internal Rate of Return (IRR) for each investment, with answers rounded to the nearest basis point (e.g., 3.76%).
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**Instructions:**
- Click the icon to see the Worked Solution (Calculator Use).
- Click the icon to see the Worked Solution (Spreadsheet Use).
**Questions:**
- The yield for investment A is ___________%. (Round to two decimal places.)
- The yield for investment B is ___________%. (Round to two decimal places.)
- The yield for investment C is ___________%. (Round to two decimal places.)
- The yield for investment D is ___________%. (Round to two decimal places.)
- The yield for investment E is ___________%. (Round to two decimal places.)
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**Data Table:**
| Investment | Initial Investment | Future Value | End of Year |
|------------|--------------------|--------------|-------------|
| A | $1,800 | $6,387 | 14 |
| B | $9,500 | $14,353 | 11 |
| C | $600 | $3,091 | 17 |
| D | $3,500 | $4,505 | 3 |
| E | $5,800 | $12,092 | 12 |
(Note: Click on the icon located on the top-right corner of the data table to copy its contents into a spreadsheet.)
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**Graph/Diagram Explanation:**
This section contains a data table that compares the initial investment, future value, and time frame for five different investments (A through E). Each row represents a unique investment opportunity with specific financial parameters that will be used to calculate the IRR for decision-making purposes.
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