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# CH.7 - 7.1 A rate of return of 100 means that the entire...

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7.1 A rate of return of –100% means that the entire investment is lost and no money is returned. 7.4 Monthly = \$100,000(A/P,0.5%,360) \$599.55 Ballon = \$100,000(F/P,0.5%,60) - \$599.55(F/A,0.5%,60) \$100,000(1.3489) - \$599.55(69.7700) \$93,059.40 7.7 0 = -\$30,000 + (\$27,000 - \$18,000)(P/A,i,5) + \$4,000(P/F,i,5) n NCF 0 \$(30,000.00) 1 \$9,000.00 2 \$9,000.00 3 \$9,000.00 4 \$9,000.00 5 \$13,000.00 IRR = 17.85% 7.10 n Cost Rev. NCF 0 -10 0 -10 1 -4 2 -2 2 -4 3 -1 3 -4 9 5 4 -3 9 6 5 -3 9 6 6 -3 9 6 IRR = 14.55% 7.13 n Cost Rev. NCF 0 \$(41,000,000.00) \$- \$(41,000,000.00) 1 \$- \$3,300,000.00 \$3,300,000.00 2 \$- \$3,300,000.00 \$3,300,000.00 3 \$- \$3,300,000.00 \$3,300,000.00 4 \$- \$3,300,000.00 \$3,300,000.00 5 \$- \$3,300,000.00 \$3,300,000.00

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6 \$- \$3,300,000.00 \$3,300,000.00 7 \$- \$3,300,000.00 \$3,300,000.00 8 \$- \$3,300,000.00 \$3,300,000.00 9 \$- \$3,300,000.00 \$3,300,000.00 10 \$- \$3,300,000.00 \$3,300,000.00 11 \$- \$3,300,000.00 \$3,300,000.00 12 \$- \$3,300,000.00 \$3,300,000.00 13 \$- \$3,300,000.00 \$3,300,000.00 14 \$- \$3,300,000.00 \$3,300,000.00 15 \$- \$3,300,000.00 \$3,300,000.00 16 \$- \$3,300,000.00 \$3,300,000.00 17 \$- \$3,300,000.00 \$3,300,000.00 18 \$- \$3,300,000.00 \$3,300,000.00 19 \$- \$3,300,000.00 \$3,300,000.00 20 \$- \$3,300,000.00 \$3,300,000.00 21 \$- \$3,300,000.00 \$3,300,000.00 22 \$- \$3,300,000.00 \$3,300,000.00 23 \$- \$3,300,000.00 \$3,300,000.00 24 \$- \$3,300,000.00 \$3,300,000.00 25 \$- \$3,300,000.00 \$3,300,000.00 26 \$- \$3,300,000.00 \$3,300,000.00 27 \$- \$3,300,000.00 \$3,300,000.00 28 \$- \$3,300,000.00 \$3,300,000.00 29 \$- \$3,300,000.00 \$3,300,000.00 30 \$- \$3,300,000.00 \$3,300,000.00 a) IRR = 6.99% n Cost Rev. NCF 0 \$(41,000,000.00) \$- \$(41,000,000.00) 1 \$- \$4,380,000.00 \$4,380,000.00 2 \$- \$4,380,000.00 \$4,380,000.00 3 \$- \$4,380,000.00 \$4,380,000.00 4 \$- \$4,380,000.00 \$4,380,000.00 5 \$- \$4,380,000.00 \$4,380,000.00 6 \$- \$4,380,000.00 \$4,380,000.00 7 \$- \$4,380,000.00 \$4,380,000.00 8 \$- \$4,380,000.00 \$4,380,000.00 9 \$- \$4,380,000.00 \$4,380,000.00 10 \$- \$4,380,000.00 \$4,380,000.00 11 \$- \$4,380,000.00 \$4,380,000.00 12 \$- \$4,380,000.00 \$4,380,000.00 13 \$- \$4,380,000.00 \$4,380,000.00 14 \$- \$4,380,000.00 \$4,380,000.00 15 \$- \$4,380,000.00 \$4,380,000.00
16 \$- \$4,380,000.00 \$4,380,000.00 17 \$- \$4,380,000.00 \$4,380,000.00 18 \$- \$4,380,000.00 \$4,380,000.00 19 \$- \$4,380,000.00 \$4,380,000.00 20 \$- \$4,380,000.00 \$4,380,000.00 21 \$- \$4,380,000.00 \$4,380,000.00 22 \$- \$4,380,000.00 \$4,380,000.00 23 \$- \$4,380,000.00 \$4,380,000.00 24 \$- \$4,380,000.00 \$4,380,000.00 25 \$- \$4,380,000.00 \$4,380,000.00 26 \$- \$4,380,000.00 \$4,380,000.00 27 \$- \$4,380,000.00 \$4,380,000.00 28 \$- \$4,380,000.00 \$4,380,000.00 29 \$- \$4,380,000.00 \$4,380,000.00 30 \$- \$4,380,000.00 \$4,380,000.00 b) IRR = 10.08% 7.16 n NCF 0 \$(110,000.00) 1 \$4,800.00 2 \$4,800.00 3 \$4,800.00 4 \$4,800.00 5 \$4,800.00 6 \$4,800.00 7 \$4,800.00 8 \$4,800.00 9 \$4,800.00 10 \$4,800.00 11 \$4,800.00 12 \$4,800.00 13 \$4,800.00 14 \$4,800.00 15 \$4,800.00 16 \$4,800.00 17 \$4,800.00 18 \$4,800.00 19 \$4,800.00 20 \$4,800.00 21 \$4,800.00 22 \$4,800.00 23 \$4,800.00 24 \$4,800.00

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25 \$4,800.00 26 \$4,800.00 27 \$4,800.00 28 \$4,800.00 29 \$4,800.00 30 \$4,800.00 31 \$4,800.00 32 \$4,800.00 33 \$4,800.00 34 \$4,800.00 35 \$4,800.00 36 \$4,800.00 37 \$4,800.00 38 \$4,800.00 39 \$4,800.00 40 \$4,800.00 41 \$4,800.00 42 \$4,800.00 43 \$4,800.00 44 \$4,800.00 45 \$4,800.00 46 \$4,800.00 47 \$4,800.00 48 \$4,800.00 49 \$4,800.00 50 \$4,800.00 51 \$4,800.00 52 \$4,800.00 53 \$4,800.00 54 \$4,800.00 55 \$4,800.00 56 \$4,800.00 57 \$4,800.00 58 \$4,800.00 59 \$4,800.00 60 \$4,800.00 IRR = 3.93% 7.28 n Cost Rev. NCF 0 \$(33,000.00) \$- \$(33,000.00) 1 \$(15,000.00) \$18,000.00 \$3,000.00 2 \$(40,000.00) \$38,000.00 \$(2,000.00) 3 \$(20,000.00) \$55,000.00 \$35,000.00
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CH.7 - 7.1 A rate of return of 100 means that the entire...

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