Unformatted text preview: received 16 payments). If the bond is purchased for $3,800 what effective annual rate of interest would be realized on this investment opportunity? Problem 2: A small company purchased now for $23,000 will lose $1,200 each year for the first four years. An additional $8,000 invested in the company during the fourth year will result in a profit of $5,500 each year from the 5 th year through the 15 th year. At the end of 15 years, the company can be sold for $33,000. a) Calculate the IRR (better to use interpolation here). b) Calculate the FW if MARR = 12%. c) Calculate the IRR when ERR is at 12%. d) When will the company breakeven? (Use discounted payback)....
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This note was uploaded on 09/23/2011 for the course IE 151 taught by Professor J3patino during the Spring '11 term at University of the Philippines Diliman.
- Spring '11