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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