Quiz set 5

# Quiz set 5 - Assignment Oct 13 to Tuesday 7.34 7.35 i B A =...

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Assignment Oct 13 to Oct 22, 2009 Tuesday, 10/13/09: 7.34 B. choose Therefore 15% % 11 . 28 = - A B i 7.35 i A2-A1 = 29.92% > 10% Therefore choose A 2 Thursday, 10/15/09: Consider the following project cash flows: n A n 0 \$ -420k 1 +180k 2 +180k 3 +180k The MARR is 12 % per year. a) Find the IRR (internal rate of return) b) Find the ERR (external rate of return) c) Is the project acceptable? IRR = 13.72% ERR = 13.1% Yes 7.17 For project C use the ERR (external rate of return procedure covered in class rather than the more complicated procedure shown in example 7.9 of Park’s text.) b) C mixed c) A and B were given; C: ERR ≈ 12.1% d) All 3 projects acceptable Note: For project C we get 12.24% per Park’s procedure. See example 7.9. You will not be held responsible for Park’s procedure.

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Tuesday, 10/20/09 9.3 \$1,591,500 9.8 n Dn Bn Dn if switch to SL 0 0 50,000 0 1 14,286 35,714 7,143 2 10,204 25,510 5,952 3 7,288 18,222 5,102 4 5,207 13,015 4,556 5 4,338 8,677 4,338 6
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Quiz set 5 - Assignment Oct 13 to Tuesday 7.34 7.35 i B A =...

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