MS303_Assignment+8

MS303_Assignment+8 - Assignment 7 Solutions 8.15. a) $10000...

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Assignment 7 Solutions 8.15. a) $10000 (1+5.07) = $10000 (6.07) = $60700 b) $60700 (P/F, 6%, 20) = $18926.50 c) $10000 (1 + g G ) ±² = 18926.50 g G = 3.24% d) ³ ± = $10000 (1-0.18) (1-0.31) = $5658 $5658 (1 + g ´ ) µ¶ = $60700 g ´ = 14.1% 8.20. a) Cost in year 2020: $15000 (F/P,6%,13) = $31994 Cost in year 2021: $31994 (1+0.06) = $33914 Cost in year 2022: $33914 (1+0.06) = $35948 Cost in year 2023: $35948 (1+0.06) = $38105 Total Cost (undiscounted dollars) = $139961 b) g ´ = · ¸ 4($31994) = $127976 = ³ ±²±² (not $139961!) A = $127976(A/P,0.5%,(13.12=156 months)) = = $127976(0.00925) = $1184 per month 8.35. a) ¹ºº »¼ = ¹ºº ½¾ + · ¿ + (¹ºº ½¾ )(· ¿ ) · ¿ = 10% per year, ¹ºº ½¾ = 18% ¹ºº »¼ = 0.18 + 0.1 + (0.18)(0.1) = 0.298 = 29.8% . .. IRR on project in Country A currency b) · ¿ = -10% per year ¹ºº »¼ = 0.18 - 0.1 + (0.18)(-0.1) = 0.062 = 6.2% . .. IRR on project in Country B currency
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MS303_Assignment+8 - Assignment 7 Solutions 8.15. a) $10000...

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