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| Teaching Since: | Apr 2017 |
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| Questions Answered: | 9562 |
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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
Problem 5-10 Problems with IRR
| Suppose you are offered $8,200 today but must make the following payments: |
| Year | Cash Flows ($) | ||
| 0 | $ 8,200 Â Â Â Â Â Â Â Â | ||
| 1 | ?4,500 Â Â Â Â Â Â Â Â | ||
| 2 | ?3,200 Â Â Â Â Â Â Â Â | ||
| 3 | ?2,300 Â Â Â Â Â Â Â Â | ||
| 4 | ?1,100 Â Â Â Â Â Â Â Â | ||
| a. | What is the IRR of this offer? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
| Â Â IRR | Â %Â Â |
| b. | If the appropriate discount rate is 11 percent, should you accept this offer? | ||||
| Â | Â | ||||
| Â |
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| c. | If the appropriate discount rate is 22 percent, should you accept this offer? | ||||
| Â | Â | ||||
| Â |
|
| d-1. |
What is the NPV of the offer if the appropriate discount rate is 11 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16)) |
| Â Â NPV | $Â Â Â |
| d-2. |
What is the NPV of the offer if the appropriate discount rate is 22 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16)) |
| Â Â NPV | $Â Â Â Â |
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