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
VikaD [51]
3 years ago
11

You are evaluating five different investments, all of which involve an upfront outlay of cash. Each investment will provide a si

ngle cash payment back to you in the future. Details of each investment appears here: . Calculate the IRR of each investment. State your answer to the nearest basis point (i.e., the nearest 1/100th of 1%, such as 3.76%).
Business
1 answer:
OverLord2011 [107]3 years ago
5 0

Answer:

A

IRR = 8.27%

B

IRR = 4.69%

C

IRR = 10.77%

D

IRR = 9.47%

E

IRR = 4.81%

Explanation:

Here is the table containing information on the investments

Initial investment value  Future Investment Value Year

$1,100                                    $2,637                           11                                 $9,500                                 $13,091                             7                                   $400                                     $1,855                             15                              $3,200                                  $5,030                              5                            $6,000                                   $9,598                            10

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

A

Cash flow in year 0 = $-1,100

Cash flow from year 0 - 10 = 0

Cash flow in year 11 =    $2,637  

IRR = 8.27%

B

Cash flow in year 0 = $-9,500

Cash flow from year 0 - 6 = 0

Cash flow in year 7 = $13,091  

IRR = 4.69%

C

Cash flow in year 0 = $-400

Cash flow from year 0 - 14 = 0

Cash flow in year 15 = $1,855  

IRR = 10.77%

D

Cash flow in year 0 = $-3200

Cash flow from year 0 - 4 = 0

Cash flow in year 5 =   $5,030  

IRR = 9.47%

E

Cash flow in year 0 = $-6000

Cash flow from year 0 - 9 = 0

Cash flow in year 10 = 9598

IRR = 4.81%

To find the IRR using a financial calculator:

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.  

You might be interested in
Raven Company has a target of earning $71,200 pre-tax income. The contribution margin ratio is 16%. What amount of dollar sales
Jlenok [28]

Answer:

$685,000  

Explanation:

First and foremost, the formula for determining the contribution margin ratio can be used to determine the target dollars sales as shown below:

contribution margin ratio=contibution margin/sales revenue

contribution margin ratio=16%

contribution margin required=pretax income+fixed costs

contribution margin required=$71,200+$38,400=$109,600  

16%=$109,600/sales revenue

16%*sales revenue=$109,600

sales revenue=$109,600/16%

sales revenue=$685,000  

6 0
3 years ago
Economists believe that scarcity is
krek1111 [17]

Answer:

Scarcity refers to the basic economic problem, the gap between limited  that is, scarce  resources and theoretically limitless wants. This situation requires people to make decisions about how to allocate resources efficiently, in order to satisfy basic needs and as many additional wants as possible.

HOPE THIS HELPED!!!!!!!!!!XDDDDD

8 0
3 years ago
Read 2 more answers
At Medallion Industries, variable cost per unit is budgeted to be $8.00 and fixed cost per unit is budgeted to be $5.00 in a per
natka813 [3]

Answer:

Total cost= $60,800

Explanation:

Giving the following information:

For 4,000 units:

Unitary variable cost= $8

Unitary fixed cost= $5

<u>First, we need to calculate the total fixed cost:</u>

Total fixed cost= 5*4,000= $20,000

<u>Now, we can determine the total cost for 5,100 units:</u>

Total cost= 5,100*8 + 20,000

Total cost= $60,800

6 0
3 years ago
Suppose the fixed interest rate on a loan is​ 5.75% and the rate of inflation is expected to be​ 4.25%. The real interest rate i
Alex

Answer:

Lenders loose and borrowers gain

Explanation:

Whenever inflation increases the value of money falls and technically erodes interest rates (hence real interest rate falls although nominal rate stays the same)

In the scenario, if the inflation rate rises to 5.5%, then the real interest rate falls further from 1.5% to (5.75% - 5.5%) 0.25%, demonstrating that the lender is loosing further.

Contrarily, the borrower will technically be paying lesser interest to the lender because he will be paying lesser money in value to the lender both in terms of interest and principal

8 0
3 years ago
If a perfectly competitive firm finds that price is less than average variable cost, it should: shut down immediately. increase
Musya8 [376]

Answer: It should shot down immediately.

Explanation:

If the market price is equal to average cost at the profit-maximizing level of output, then the firm is making zero profits. If the market price that a perfectly competitive firm faces is below average variable cost at the profit-maximizing quantity of output, then the firm should shut down operations immediately.

4 0
3 years ago
Other questions:
  • A company issued 70 shares of $30 par value preferred stock for $4,000 cash. The journal entry to record the issuance is:
    9·1 answer
  • Help me on statistics Homework.
    9·1 answer
  • Ski resorts are interested in the mean age that children take their first ski and snowboard lessons. They need this information
    11·1 answer
  • Information that has been measured and reported in a similar manner for different enterprises is _________.
    9·1 answer
  • Less than 18 percent of voluntary customer contributions in a recent year went to renewable energy development in the duke power
    13·1 answer
  • Wetherald Products, Incorporated, has a Pump Division that manufactures and sells a number of products, including a standard pum
    14·1 answer
  • In 2001, HP acquired Compaq. The merger had an impact on two different markets: desktop PCs and servers. Pre-merger market share
    8·1 answer
  • PLEASE PLEASE PLEASE HELP !!
    11·1 answer
  • When the money supply decreases a.interest rates fall and so aggregate demand shifts right. b.interest rates rise and so aggrega
    11·1 answer
  • Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for t
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!