1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kaheart [24]
2 years ago
9

Two investors have the following pattern of expected returns (Before-Tax Cash Flows): Investment A: Y1: $5,000; Y2: $10,000; Y3:

$12,000; Y4: $15,000; Y4 (Sale): $120,000. Investment B: Y1: $2,000; Y2: $4,000; Y3: $1,000; Y4: $5,000; Y4 (Sale): $180,000. Investment A requires an outlay of $110,000 and Investment B requires an outlay of $120,000. What is the BTIRR on each investment?
Business
1 answer:
Arada [10]2 years ago
4 0

Answer:

Investment A = 11.089%

Investment B = 12.772%

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

The internal rate of return can be calculated using a financial calculator

For investment A,

Cash flow in year zero = -$110,000

Cash flow in year 1 = $5,000

cash flow in Y2 = $10,000

cash flow in Y3 = $12,000

Cash flow in Y4 = $15,000 + $120,000 = $135,000

Irr = 11.089%

For investment B,

Cash flow in year zero = -$120,000

Cash flow in year one = $2,000

cash flow inY2: $4,000

cash flow in Y3: $1,000

cash flow in Y4: $5,000 + $180,000 = $185,000

IRR = 12.772%

To find the IRR using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

I hope my answer helps you

You might be interested in
Which of the following is the most appropriate topic to address in a college application essay?
Aleksandr [31]

Answer:

C

Explanation:

because I feel that many individuals would select the most basic option, such as A or B.

5 0
2 years ago
Which statement is the converse of the given statment
pochemuha
Might seem controversial though :) but I am pretty sure that the correct variant that properly shows the converse of given statement is the third one. As you know, the converse (in plane language) has the same meaning of the statement just by replacing two points. This statement has positive tone (if you make - you ll have) so it's directly coincides with C(you have, cause you have made)
4 0
3 years ago
Max points can water be wet
Montano1993 [528]
No water can't be wet
8 0
3 years ago
Read 2 more answers
Gabby Company sells a product for $ 100 per unit. Variable costs are $ 60 per​ unit, and fixed costs are $ 2 comma 500 per month
Ann [662]

Answer:

(a) $40

(b) $24,000

(c) 40%

Explanation:

Given that,

Selling price = $100 per unit

Variable costs = $60 per​ unit

Fixed costs = $2,500 per month

Contribution margin per unit:

= Selling price - Variable costs

= $100 per unit - $60 per​ unit

= $40

Total Contribution margin:

= Contribution margin per unit × No. of units sold

= $40 × 600 units

= $24,000

Contribution margin ratio:

= (Selling price - Variable costs) ÷ Selling price

= ($100 per unit - $60 per​ unit) ÷ $100 per unit

= 0.4 or 40 %

4 0
2 years ago
What is a minimum balance when it comes to account requirement?
Komok [63]
<span>I would say A)minimum dollar amount that can be in an account  wouldn't want an account with just a dollar in it, it would be a waste of time and space.</span>
7 0
3 years ago
Read 2 more answers
Other questions:
  • Which of the following scenarios is a circumstance in which it would be ethical to practice confidentiality?
    11·2 answers
  • In a CBA, if the benefits of a control outweigh the costs of implementing that control, then the control can be implemented to r
    8·1 answer
  • An example of a product that would be sold through niche marketing is
    10·1 answer
  • The textile industry in Pakistan is growing over the time due to the modernization, high standards of living and increasing dema
    9·1 answer
  • In 1 or 2 sentences, describe the effect of competition on prices of items being sold.
    8·1 answer
  • The price of a bond is equal to the sum of the present values of its future payments. Suppose a certain bond pays $50 one year f
    7·1 answer
  • Brown Company’s December 31, Year 1 balance sheet showed $1,800 cash, $200 accounts payable, $600 common stock, and $1,000 retai
    9·1 answer
  • Out of a list of the values 12, 7, 3, 5, 8, and 2, which result would the MIN function return?
    8·2 answers
  • Imagine that in 2019 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some ti
    5·1 answer
  • Bond market values are expressed as a percentage of their par (face) value. For example, a company's bonds might be trading at 1
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!