class_ch.7

# class_ch.7 - 5.16 ERR FWd(i = FWr(i is equal to PW(4(1 i)^n...

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Rate of Return (IRR) Let PW(i%) = 0 solve for i fig 7.2 n NCF 0  \$(1,000.00) 1  \$-    2  \$-    3  \$500.00  4  \$-    5  \$1,500.00  i* =  16.9% fig 7.3 n NCF 0  \$(500,000.00) 1  \$10,000.00  2  \$10,000.00  3  \$10,000.00  4  \$10,000.00  5  \$10,000.00  6  \$10,000.00  7  \$10,000.00  8  \$10,000.00  9  \$10,000.00  10  \$710,000.00  i* =  5.16% i*(rate) =

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Unformatted text preview: 5.16% ERR FWd(i) = FWr(i) is equal to PW(4%)(1+i)^n = FWr(4%) external rate 4% n NCF Fn \$2,000.00 \$2,000.00 1 \$(500.00) \$1,900.00 2 \$(8,100.00) \$(5,820.00) 3 \$6,800.00 -5820(1+i') + 6800 i' = 16.84% MARR = 20% i' < MARR not feasible...
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## This note was uploaded on 04/11/2010 for the course MST 502 taught by Professor Atals during the Spring '10 term at SUNY IT.

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class_ch.7 - 5.16 ERR FWd(i = FWr(i is equal to PW(4(1 i)^n...

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