Given the following cash flow Year 0 Years 1-2 Years 3-10 Years 11-15 -$8,000 -$3,000/year $6,500...

 

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Given the following cash flow Year 0 Years 1-2 Years 3-10 Years 11-15 -$8,000 -$3,000/year $6,500 in year 3 and increases annually by 8%thereafter -$12,000/year Examine if it is using a discount rate of 10%, compute the following items: a) (4 pts) Present worth b) (4 pts) Future worth c) (4pts) Equivalent annual worth d) (8 pts) Internal rate of return (show all if there are multiple) e) (4 pts) Modified internal rate of return at a 8% borrowing and 12% reinvestment rate f) (8 pts) RIC at a 10% reinvestment rate g) (4 pts) Payback period (non-discounted) h) (4 pts) Payback period (discounted at discount rate) Given the following cash flow Year 0 Years 1-2 Years 3-10 Years 11-15 -$8,000 -$3,000/year $6,500 in year 3 and increases annually by 8%thereafter -$12,000/year Examine if it is using a discount rate of 10%, compute the following items: a) (4 pts) Present worth b) (4 pts) Future worth c) (4pts) Equivalent annual worth d) (8 pts) Internal rate of return (show all if there are multiple) e) (4 pts) Modified internal rate of return at a 8% borrowing and 12% reinvestment rate f) (8 pts) RIC at a 10% reinvestment rate g) (4 pts) Payback period (non-discounted) h) (4 pts) Payback period (discounted at discount rate)

Answer rating: 100% (QA)

To solve the problem well calculate each item step by step a Present Worth To calculate the present worth we need to find the discounted value of each cash flow and sum them up The discount rate is 10 ... View the full answer