A) An engineer takes a loan form a lending company equals to $10,000. The lending company...

 

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A) An engineer takes a loan form a lending company equals to $10,000. The lending company takes X % annual interest rate compounded quarterly. The engineer agrees to pay off the loan in 10 equal payments at $1200/year. 1) Detemine the annual effective interest rate (2 points) 2) Detemine the annual nominal interest rate. (1 points) B) For the cash flow below, Year 1 3 4 Revenues $ 25000 15000 4000 18000 Cost S 6000 30000 7000 6000 14000 3) Are there multiple rates of retum values for this cash flow (apply the two rules)? (2 points) 1. Find the extemal rate of retum using the modified rate of retum approach (MIRR), an investment rate of 12% per year, and a borrowing rate of 8%. Assuming that the MARR =10%. (4 points) 2. Is this project justified or not and why? (1 point) A) An engineer takes a loan form a lending company equals to $10,000. The lending company takes X % annual interest rate compounded quarterly. The engineer agrees to pay off the loan in 10 equal payments at $1200/year. 1) Detemine the annual effective interest rate (2 points) 2) Detemine the annual nominal interest rate. (1 points) B) For the cash flow below, Year 1 3 4 Revenues $ 25000 15000 4000 18000 Cost S 6000 30000 7000 6000 14000 3) Are there multiple rates of retum values for this cash flow (apply the two rules)? (2 points) 1. Find the extemal rate of retum using the modified rate of retum approach (MIRR), an investment rate of 12% per year, and a borrowing rate of 8%. Assuming that the MARR =10%. (4 points) 2. Is this project justified or not and why? (1 point)

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A Quarterly equal payment Loan amount PVIFA x i x n 10 1200 10000 8333 So PVIFA o... View the full answer