EXAMPLE 2.8 A local university has initiated a logo-licensing program with the clothier Holister, Inc. Esti- mated fees (revenues) are $80,000 for the first year with uniform increases to a total of $200,000 by the end of year 9. Determine the gradient and construct a cash flow diagram that identifies the base amount and the gradient series.

You have the following cash flows: Year 0 Net Cash Flow, $ -6,000 1 -5,000 2 +12,000 3 -2,000 +6,000 For these cash flows, it has already been determined there may be more than one positive root . Calculate the EROR using the MIRR method with i 16% and is-8%. HINT: Draw the Cash Flow diagram. You must show the mathematical setup and detailed calculations you used to calculate your EROR to two decimal points by hand. An Excel solution is not sufficient.

A pharmaceutical company developed four investment plans. The initial investment and the corresponding annual cash flows of the four investment plans for consecutive 5 years are shown in the following Table Q1.  Project Name  I  II  III  IV  Initial Investment (OMR)  44000 62000 100000 109000 Annual Cash inflow (OMR)  10000 22000  27000  44000 Identify the best project and decide the ranking based on the following profitability methods.  a) Average rate of return.  b) Payback period.  c) Net Present value with discounting rate at 8%  d) Benefit to cost ratio with discounting rate at 11%  e) Internal rate of return for range of suitable discounting rate    please solve d and e or all

A pharmaceutical company developed four investment plans. The initial investment and the corresponding annual cash flows of the four investment plans for consecutive 5 years are shown in the following Table Q1.  Project Name  I  II  III  IV  Initial Investment (OMR)  44000 62000 100000 109000 Annual Cash inflow (OMR)  10000 22000  27000  44000 Identify the best project and decide the ranking based on the following profitability methods.  a) Average rate of return.  b) Payback period.  c) Net Present value with discounting rate at 8%  d) Benefit to cost ratio with discounting rate at 11%  e) Internal rate of return for range of suitable discounting rate

5. A cash flow sequence starts in year 1 at $3000 and decreases by $200 each year through year 10. (a) determine the value of the gradient G; (b) determine the amount of cash flow in year 8; and (c) determine the value of n for the gradient. |¶

company that makes clutch disks had the cash flows shown below for one department with a MARR of 25%. Calculate the rate of return by using return on invested capital approach with a reinvestment rate of 15% per year. Should the company continue to make clutch disks? Year 0 1 2 3 Cash Flow, $ Ft 500 -600 200 -190