A $300,000 investment is made with anticipated cash flows of $65,000 a year fortwelve years and terminal payment of $261,100 in year thirteen.

a.)What is the expected return on this investment?

b.)What would one pay for this investment and the end of year five assuming a required rate of return equals 21% and the expected cash flows are not expected to change?

c.)What return would the seller earn?

Answer rating: 100% (QA)

Answer To solve this problem we need to calculate the internal rate of return IRR for the investment ... View the full answer