Yee-Swian has received an advance of 3,000 on a software program she is writing. She will...
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Yee-Swian has received an advance of 3,000 on a software program she is writing. She will spend 21,000 this year writing it (consider the money to have been spent at the end of year 1), and then receive 18,000 at the end of the second year. The MARR is 10%. (a) What is the IRR for this project? Does the result make economic sense? (b) What is the precise ERR for this project? (c) What is the approximate ERR for this project? (d) Based on the precise ERR and the approximate ERR, should this project be accepted? Yee-Swian has received an advance of 3,000 on a software program she is writing. She will spend 21,000 this year writing it (consider the money to have been spent at the end of year 1), and then receive 18,000 at the end of the second year. The MARR is 10%. (a) What is the IRR for this project? Does the result make economic sense? (b) What is the precise ERR for this project? (c) What is the approximate ERR for this project? (d) Based on the precise ERR and the approximate ERR, should this project be accepted?
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