Mary, a project manager for ABC Inc., is reviewing a product quality improvement project. She has...
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Mary, a project manager for ABC Inc., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $16,320. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows. She knows only that the project has: • a 8-year project life with an initial cost of $250,000. • a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 5%. Find the annual revenue first and then calculate the IRR for the project = ? Ⓒ 14% < IRR (i*) < 15% 13% < IRR (i*) < 14% 10% < IRR (i*) < 11% O9% < IRR (i*) < 10% 8% < IRR (i*) < 9% Based on the following cash flows (t=0 to t=4), calculate the Precise (exact) ERR. Assume the MARR is at 10%. t=0, receipts of 10,000. t=1, disbursement of 7,500. t=2, disbursement of 7,500. t=3, no cash flow t=4, receipt of 3,900. 3.3679% Ⓒ 2.0341% Ⓒ 14.5243% Ⓒ 2.7032% Ⓒ 1.3606% Mary, a project manager for ABC Inc., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $16,320. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows. She knows only that the project has: • a 8-year project life with an initial cost of $250,000. • a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 5%. Find the annual revenue first and then calculate the IRR for the project = ? Ⓒ 14% < IRR (i*) < 15% 13% < IRR (i*) < 14% 10% < IRR (i*) < 11% O9% < IRR (i*) < 10% 8% < IRR (i*) < 9% Based on the following cash flows (t=0 to t=4), calculate the Precise (exact) ERR. Assume the MARR is at 10%. t=0, receipts of 10,000. t=1, disbursement of 7,500. t=2, disbursement of 7,500. t=3, no cash flow t=4, receipt of 3,900. 3.3679% Ⓒ 2.0341% Ⓒ 14.5243% Ⓒ 2.7032% Ⓒ 1.3606%
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Managerial Economics Theory Applications and Cases
ISBN: 978-0393912777
8th edition
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
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