The internal rate of return of the opportunity. Introduction: The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return .

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Answer 1

Question

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

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Suppose you invest $2,000 today and receive $11,000 in five years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $2,000 upfront, but pays an equal amount at the end of each year for the next five years. If this investment has the same IRR as the first one, what is the amount you will receive each year?

Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? a. What is the internal rate of return (IRR) of this opportunity? The IRR of this opportunity is%. (Round to two decimal places.) b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? The periodic payment that gives the same IRR is $ (Round to the nearest cent.)

An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?

Answer 2

Question

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Answer 6

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Answer 7

Chapter 4, Problem 48P

a)

Summary Introduction

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Answer 8

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Answer 9

b)

Summary Introduction

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 4.1 - Prob. 1CC Ch. 4.1 - Prob. 2CC Ch. 4.2 - Prob. 1CC Ch. 4.2 - Prob. 2CC Ch. 4.2 - Prob. 3CC Ch. 4.3 - Prob. 1CC Ch. 4.3 - Prob. 2CC Ch. 4.4 - Prob. 1CC Ch. 4.4 - What benefit does a firm receive when it accepts a...Ch. 4.5 - How do you calculate the present value of a a....

The internal rate of return of the opportunity. Introduction: The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return .

Solution Summary: The author explains the internal rate of return, which is 37.97%. Person X invests 2000 at present and obtains 10,000 in five years.

Concept explainers

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

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Chapter 4 Solutions

The internal rate of return of the opportunity. Introduction: The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return .

Solution Summary: The author explains the internal rate of return, which is 37.97%. Person X invests 2000 at present and obtains 10,000 in five years.

Concept explainers

To determine: The internal rate of return of the opportunity. Introduction: The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

To determine: The amount that Person X gets every year. Introduction: The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

Want to see the full answer?

Chapter 4 Solutions

To determine: The internal rate of return of the opportunity.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.

To determine: The amount that Person X gets every year.

Introduction:

The discount rate that makes the net present value for all the cash flows equivalent to zero is known as the internal rate of return.