An investment is expected to produce the following annual year-end cash flows: Year 1 $ 5,000.00 Year
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An investment is expected to produce the following annual year-end cash flows:
| Year 1 | $ 5,000.00 |
|---|---|
| Year 2 | $ 1,084.00 |
| Year 3 | $ .00 |
| Year 4 | $ 5,160.00 |
| Year 5 | $ 6,160.00 |
| Year 6 | $ 1,079.68 |
The investment will cost $13,400 today.
a. Will this investment be profitable? b. What will be the IRR (compounded annually) on this investment? c. Show how much of each years cash flow is recovery of the $13,400 investment and how much of the cash flow is return on investment.
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