Compute the rate of return for the following cash flows:

Year	Cash Flow
1-5	$2,643
6-10	$28,942

Question 2 -You want to have $802,219 at age 52 when you plan to retire. If you invest $33,057 at age 34, what Rate of Return must you receive to achieve your goal?

Question 3 -A monument's annual maintenance cost is estimated to be $1,002. If a $58,806 fund is set up to pay for this maintenance, what interest rate must the fund earn to pay for care indefinitely if interest is compounded quarterly?

Question 4 -Last year a town spent $24,062 to purchase water from an aqueduct. What would be the rate of return if they spent $135,403 to dig a well that lasts indefinitely (i.e. forever)?

Question 5 -What is the rate of return for the following incremental analysis?

Investment	1	2
Initial Investment	$78,052	$85,947
Annual Return	$5,653	$10,695
Salvage Value	$78,052	$85,947

 

 

 

 

 

Answer rating: 100% (QA)

Answer 1 To compute the rate of return we need to first find the total cash inflow from the investment and then use the formula for rate of return The total cash inflow can be calculated by adding the ... View the full answer