Midterm(case7)

Midterm(case7) - Joseph Murphy Case 7 Year 1993 1994 1995...

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Joseph Murphy Case 7 Year n CF CCF i PW 1993 0 $200.00 $200.00 0% $650.00 1994 1 $100.00 $300.00 10% $195.98 1995 2 $50.00 $350.00 20% $41.88 1996 3 $(1,800.00) $(1,450.00) 30% $(2.63) 1997 4 $600.00 $(850.00) 40% $(7.08) 1998 5 $500.00 $(350.00) 50% $2.00 1999 6 $400.00 $50.00 60% $14.34 2000 7 $300.00 $350.00 70% $26.12 2001 8 $200.00 $550.00 2002 9 $100.00 $650.00 MARR = 15% 1) IRR = 28.71% Yes, this is viable for a MARR of 17%. 2) Step 1: i1* = 28.71% i2* = 48.25% F0 = $200.00 F1 = $200(1+c) + $100 F2 = F1(1+c) + $50 F3 = F2(1+c) - $1800 F4 = F3(1+i') + $600 F5 = F4(1+i') + $500 F6 = F5(1+i') + $400 F7 = F6(1+i') + $300 F8 = F7(1+i') + $200 F9 = F8(1+i') + $100
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F0 = $200.00 15% F1 = $330.00 F2 = $495.50 F3 = $(1,131.08) F4 = F3(1+i') + $600 F5 = F4(1+i') + $500 F6 = F5(1+i') + $400 F7 = F6(1+i') + $300 F8 = F7(1+i') + $200 F9 = F8(1+i') + $100 i' = 21.24% c < i1*, but i' < i1* This shows choice a does apply if c = F0 = $200.00 50% F1 = $400.00 F2 = $590.00 F3 = $(1,003.50) F4 = F3(1+i') + $600 F5 = F4(1+i') + $500 F6 = F5(1+i') + $400
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Midterm(case7) - Joseph Murphy Case 7 Year 1993 1994 1995...

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