Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 6, Problem 58P

(a):

To determine

Calculate the RIOC rate..

(b):

To determine

Calculation the external rate of return through TOT approach.

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QUESTION 4 For the nonconventional net cash flow series shown, the external rate of retum per year using the MIRR method, with an investment rate of 20% per year and a borrowing rate of 8% per year, is closest to: Year 3 NCF, S -40,000 +16,673 -29,000 +25,000 +53,798
Answer the following question with complete SOLUTIONS and CASH FLOW DIAGRAM. An engineer launches a project in the country's top technohub. This involves rental of a computer unit for online class students. He felt that because of the density of students in the area, 90% of his 30-units will be occupied per sem (5 months each) per year. He desires a rate of return of 20%. Other pertinent data are the following: Assess the project using (1) ROR, (2) Present Worth Method, and (3) Future Worth Method. (4) Estimate the payback period of this project.
For the net cash flow series, (a) determine the number of possible i* values using the two sign tests, (b) find the EROR using the MIRR method with an investment rate of 20% per year and a borrowing rate of 10% per year, and (c) use the MIRR function to find the EROR. Year 1 2 3 4 5 6 Net Cash Flow, $ +4100 −2000 −7000 +12,000 −700 +800

Chapter 6 Solutions

Basics Of Engineering Economy

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