Answer:
(a) It will have multiple IRRs
(b) The MIRR calculated is 10.18% . Going by MIRR result , this project will only generate returns that is equal to cost of capital(10%) .If there are other avaible more viable projects, it should be rejected ( Please see attached computation).
Explanation:
(a) The multiple IRRs occurs when cash flows change sign and result in more than one value for the IRR.
Application of IRR to value an investment is only suitable when the project has normal cash flows, i.e a negative initial cash flow (i.e initial investment) followed by a series of positive cash flows.
In this scenario, we have negative cash flow of $6m in year 4 which occured after positive cash flow of $3.5m per year from year 1 to 3. This typically make IRR unreliable. To overcome this limitation , we can use Modified Internal Rate of Return (MIRR)
(b) Please see attached for more details.
Answer:
D. Americans purchase more Canadian made products.
Explanation:
The situation that would typically result from an appreciating U.S. dollar relative to the Canadian dollar is "Americans purchase more Canadian made products."
When Americans purchase more Canadian-made products, the Canadian dollar will rise or appreciate against the U.S. dollar. This is based on the principle of trade balance, whereby the monetary value of a country's imports and exports are evaluated over a given period.
In this case, the monetary value of Canadian exports against the U.S. dollar will indicate a positive trade surplus, hence, the Canadian dollar or currency will appreciate against the U.S. dollar.
<span>The difference in a variable measured over observations (time, customers, items, etc.) is known as the variance.
</span><span>it is the measure of variability that utilizes all the data and it is calculated by
</span><span> taking the differences between each number and the mean,. Then these differences are squared in order to be positive. At the end the sum of the squares is divided by the number of values in the set.</span>
In the process of straight rebuys, the buyer has this tendency to be the only member of the buying centre that is involved in the operation. In addition to that, the method is also used to describe the when a consumer would have to buy again the same product without referring to the information attached to it.
Answer:
D. 102.2
Explanation:
Using a simultaneous equation
Since the year is constant
We will use the the basis and municipal bond as our variables
So equation 1 = 7x+5y=104
Eqn ii= 6x + 5y= 101
Using eliminating method
X=3
Substitute for x in equation 1 to get the value of y
7(3) + 5y=104
5y=104-21
Y=16.6
To get the price for the percent of 6.40 at 5% basis substitute for the value of X and Y respectively in the both equation
6.4x+5y=?
6.4(3) + 5(16.6)=
19.2+83=102.2
