The business plan for KnowIt, LLC, a start-up company that manufactures portable multigas detectors, showed equivalent annual cash flows of $400,000 for the first 5 years. If the cash flow in year 1 was $313,000 and the constant increase thereafter was $50,000 per year, what interest rate was used in the calculation? what is the interest rate used in the calculation?

The business plan for KnowIt, LLC, a start-up company that manufactures portable multigas detectors, showed equivalent annual cash flows of $400,000 for the first 5 years. If the cash flow in year 1 was $313,000 and the constant increase thereafter was $50,000 per year, what interest rate was used in the calculation? what is the interest rate used in the calculation?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter14: Multinational Capital Budgeting

Section: Chapter Questions

Problem 1IEE

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The business plan for KnowIt, LLC, a start-up company that manufactures portable multi-gas detectors, showed equivalent annual cash flows of $400,000 for the first 5 years. If the cash flow in year 1 was $320,000 and the constant increase thereafter was $50,000 per year, what interest rate was used in the calculation? (Solve using factors or a spreadsheet as requested by your instructor.)
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