A cash flow sequence has a receipt of $30,000 today, followed by a disbursement of $21,000 at the end of this year and again next year, and then a receipt of $10,000 three years from now. The MARR is 6 percent. a. What is the ERR for this set of cash flows? b. What is the approximate ERR for this set of cash flows? c. Would a project with these cash flows be a good investment? a. The ERR is %. (Round to two decimal places as needed.) b. The approximate ERR is %. (Round to two decimal places as needed.) c. A project with these cash flows ▼be a good investment because the ERR and approximate ERR are both the MARR.

A cash flow sequence has a receipt of $30,000 today, followed by a disbursement of $21,000 at the end of this year and again next year, and then a receipt of $10,000 three years from now. The MARR is 6 percent. a. What is the ERR for this set of cash flows? b. What is the approximate ERR for this set of cash flows? c. Would a project with these cash flows be a good investment? a. The ERR is %. (Round to two decimal places as needed.) b. The approximate ERR is %. (Round to two decimal places as needed.) c. A project with these cash flows ▼be a good investment because the ERR and approximate ERR are both the MARR.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

Problems and applications Q5
i need Q3 solution
Consider the following analysis of two alternatives, X & Y: YR X Y 0 -200 -1000 1 50 250 2 50 250 3 50 250 4 50 250 5 100 300 The MARR is 10%. Calculate the incremental rate of return in percent to the nearest 0.1 percent.
Incorrect Question 8 When calculating the Break Even Analysis, one needs to subtract the FW of the cash inflows from the PW of the cash outflows. True False
All else being constant, if estimated future cash flows increase, the internal rate of return will (decrease. change in an indeterminate way. remain the same. increase.
! Required information The annual revenues associated with several large apartment complexes are $225, $225, $275, $375, $75, and $125 for years 0, 1, 2, 3, 4, and 5, respectively. Determine the net cash flow and whether each cash flow series is conventional or nonconventional. The costs for years 0, 1, 2, 3, 4, and 5, respectively, are provided in the problems. When the cash flow is zero, assume it to be negative. Year 0 Cost, $ -1500 1 -450 The cash flow is conventional The Cumulative cash flow is 0 1 Year Cumulative CF, $ 2 -300 2 3 -400 3 4 -125 4 5 -400 5
11_The sign of various amounts at different points in time in a cash flow diagram is to be decided based on the type of the decision problem Select one:TrueFalse
1)What is the IRR for a $1000 investment that returns $200 at the end of 100 years? Note: This question will require trial and error of the interest rate using the formula for the series present worth factor. 2)What is the IRR for a $980 investment that returns $205 at the end of 6 years?
The Engineering Economist is a quarterly journal that once cost $20 for 1 year, $38 for 2 years, or $56 for 3 years. (a) What is the IRR for subscribing for 2 years rather than for 1 year at a time? (b) What is the IRR for subscribing for 3 years rather than for 1 year at a time?
A project requires an initial investment of 47,000 dollars. The instream cashflow is 800 dollars per year. The time value of money is 4.58 percent. Compute the payback period. Note: Please don't divide 47000/800 and post that answer. That is not the correct solution, we need to use 4.58 percent too to get the solution.
Find the maturity value of $ 900 at 15% for 2 years and 3 months. A. $933.75 B. $1,203.75 C. $1,241.75 D. $1,110.21
Based on the following cash flows (t=0 to t=4), calculate the Precise (exact) ERR. Assume the MARR is at 10%. t=0, receipts of 10,000. t=1, disbursement of 7,500. t=2, disbursement of 7,500. t=3, no cash flow t=4, receipt of 3,850. 1.3606% 5.4794% O 14.8930% 2.0341% 2.7032%