A student would like to buy a cross-over SUV from a local dealer, but she thinks the payments will be too high. Marketing does n
1 answer:
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Answer:
12%
Explanation:
initial investment $367,402
net cash flows 1 - 7 = $80,500
the IRR is the interest rate at which NPV = 0
we can calculate it by using Exhibit 13B-2 (present value of annuity in arrears)
$367,402 = $80,500 x present value of 7 year annuity in arrears
- present value of 7 year annuity in arrears at 14% = 4.288
- present value of 7 year annuity in arrears at 12% = 4.564
- present value of 7 year annuity in arrears at 8% = 5.206
with 14% ⇒ $80,500 x 4.288 = $345,184
with 12% ⇒ $80,500 x 4.564 = $367,402 CORRECT ANSWER
with 8% ⇒ $80,500 x 5.206 = $419,083
Solution:
Calculate mean of the sample data as shown below :
x (bar) =
= 60.5
Calculate the upper and lower control limits as below :
UCL = x (bar) + z
= 60.5 + 3
= 60.5 + 3 ( 7.778 )
= 83.834
LCL = x (bar) - z
= 60.5 - 3 ( 7.778 )
= -37.166