MS303_Assignment+8

# MS303_Assignment+8 - Assignment 7 Solutions 8.15 a \$10000(1...

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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(1...

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