Unformatted text preview: years. Calculate the discounted payback period, if the discount rate is 2%.  Project B has an initial cost of $1200 at year 0, with promises to make you $275 a year for 4 years. What is the internal rate of return of the project? If the required rate of return is 8%, is this an investment which is worth undertaking?  Suppose you reassessed Project B's earnings, and readjusted to the following table of projected cash flows: Year 0 Year 1 Year 2 Year 3 Year 4-1200 340-230 250 800 Would the IRR be an appropriate tool for assessing the project? Why or why not? If not, what would you use instead?  You read in the newspaper recently that the FOMC raised rates by 50 basis points. What could be some scenarios driving this move? What would be the consequences of raising rates?...
View Full Document
This note was uploaded on 03/28/2011 for the course ENGR 110 taught by Professor . during the Winter '10 term at UCLA.
- Winter '10