Zoom it An advertising campaign will cost $200,000 for planning and $30,000 in each of the next six years. It is expected to increase revenues permanently by $30,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $20,000 inthe first year, declining by $5,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment?The IRR is percent, which isthe MARR, so the advertising campaigna good investment.(Round to one decimal place as needed.)

Year Cash Flow 0 -2,00,000 1 20,000 + 40,000 - 40,000 2 15,000+ 40,000 - 40,000 3 10,000+…

An advertising campaign will cost $200,000 for planning and $30,000 in each of the next six years. It is expected to increase revenues permanently by $30,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $20,000 the first year, declining by $5,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? The IRR is percent, which is v the MARR, so the advertising campaign Va good investment.

An advertising campaign will cost $200,000 for planning and $30,000 in each of the next six years. It is expected to increase revenues permanently by $30,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $20,000 the first year, declining by $5,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? The IRR is percent, which is v the MARR, so the advertising campaign Va good investment.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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An advertising campaign will cost $ 200 000 for planning and $ 40 000 in each of the next six years. It is expected to increase revenues permanently by $ 40 000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $ 20 000 in the first year, declining by $ 5000 per year to zero in the fifth year. What is the IRR of this investment? If the company’s MARR is 12 percent, is this a good investment? answer should be=12.4%
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