3. When there is more than one sign change in the net cash flow of a rate of return equation, the cash flow sequence is said to be: (b) complex (a) non-conventional (c) regular (d) conventional
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- Which of the following statements are correct? The internal rate of return (IRR) generated by a positive cash flow stream of n payments. (a)is always smaller or equal than +1 (b)is always given by the solution of a quadratic equation (c)is always bigger or equal than -1 (d)can be 17 for a suitable cashflow (e)can be -2 for a suitable cashflow(a)-190,000 (b) 3. When there is more than one sign change in the net cash flow of a rate of return equation, the cash flow sequence is said to be: (b) complex (a) non-conventional (c) regular (d) conventionalIn a cash flow series regarding the gradient: Select one: a. Uniform gradient signifies that an income or disbursement changes by the same amount in each interest period b. Either an increase or decrease in the amount of a cash flow is called the gradient с. The gradient in the cash flow may be positive or negative o d. All of the above is correct
- In a cash flow series regarding the gradient: Select one: O a. Uniform gradient signifies that an income or disbursement changes by the same amount in each interest period O b. Either an increase or decrease in the amount of a cash flow is called the gradient C. The gradient in the cash flow may be positive or negative d. All of the above is correcta. Calculate the IRR for each of the three cash-flow diagrams that follow. Use EOY zero for (i) and EOY four for (ii) and (ii) as the reference points in time. What can you conclude about "reference year shift" and "proportionality" issues of the IRR method?Define the term reinvestment rate and describe how it differs for any cash flow series between (1) a PW value calculated at the MARR, and (2) the IROR value i*.
- There are four variables in the process of adjusting single cash flow amounts for the time value of money:present value (PV), future value (FV), i and n. If you know any three of these, the fourth can be computedeasilyThe PW-criterion accounts for the time value of money by converting the cash flows to the period corresponding to the present by using the equations or functional notations Select one: True O FalseSelect all the correct statements. The internal rate of return (IRR) generated by a positive cash flow stream of n payments a. is always given by the solution of a quadratic equation b. is always bigger or equal than -1 c. can be -2 for a suitable cashflow d. can be 17 for a suitable cashflow e. is always smaller or equal than +1
- 2. Compute the internal rate of return for each of the cash flows in problem 1.2. Interpret each notation or formulas those are shown in the table below and used in economic appraisal process: Factor by which to Multiply "Given Factor Functional Symbol To Find: Given: Factor Name For single cash flows: P (1+N Single payment compound (F/P.%, N) amount F Single payment present (P/F,%, N) worth For uniform series (annuitiesk A Uniform series compound (F/A, %,N) amount Uniform series present (P/A, 1%, N) worth A Sinking fund (A/F.i%, N) (1+ A Capital recovery (A/P,i%, N) (14-1 3. If you are planning a trip to other place after 3 years. And, if you intend to deposit savings of ETB 1,000 now and expects to deposit another ETB 500 at the End of next year. If the bank pays 5% interest per year compounded annually, how much money can you expect to be available to you at the time of your departure? 4. Acompany has to replace a present facility after 15 years at an outlay of ETB. 5,00,000. It plans to deposit an equal amount at the end of every year for the next 15 years at…For the cash flows shown and in preparation for a PW-based rate of return analysis, determine the incremental cash flow between machines B and Afor (a) year 0, (b) year 3, and (c) year 6.