Consider two investments. A and B. with the sequences of cash flows given in Table P7.13. (a)
Question:
Consider two investments. A and B. with the sequences of cash flows given in Table P7.13.
(a) Compute i* for each investment.
(b) Plot the present-worth curve for each project on the same chart, and find the interest rate that makes the two projects equivalent.
Transcribed Image Text:
TABLE P7.13 n 0 1 2 3 4 5 Net Cash Flow Project A -$35,000 2,000 6,000 10,000 24,800 27,050 Project B -$35,000 11,000 10,000 10,000 8,000 5,000
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