A project with an investment of $10,000 has net cash flows of $9, 000, $3,000, and $1,000 for each of the next three years. Compute the average rate of return for the project. 2.111 1.869 0.775 0.999 0.867

A project with an investment of $10,000 has net cash flows of $9, 000, $3,000, and $1,000 for each of the next three years. Compute the average rate of return for the project. 2.111 1.869 0.775 0.999 0.867

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EB: Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two,...

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Question

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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