# Question

In the modified rate of return approach for determining a single interest rate from net cash flows, state which interest rate is usually higher, the investment rate ii or the borrowing rate ib. State why.

## Answer to relevant Questions

Use the modified rate of return approach with an investment rate of 18% per year and a borrowing rate of 10% to find the external rate of return for the following cashflows.For the cash flow series below, calculate the external rate of return, using the return on invested capital approach with an investment rate of 14% per year. Year Cash Flow, $0 .......... 30001 .......... –20002 ...In 2011, El Paso Water Utilities (EPWU) issued bonds worth $9.125 million to improve the Van Buren dam in central El Paso and to finance three other drainage projects. The bonds were purchased by the Texas Water Development ...According to Descartes’ rule and Norstrom’s criterion, the number of positive i* values for the following cash flow sequence is:(a) 1(b) 2(c) 3(d)4If $80,000 is invested at 30% and another $50,000 is invested at 20% per year, what is the overall rate of return on the entire $130,000?Post your question

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