Question: Please show in-depth spreadsheet solution Samara, an engineer working for GE, invested her bonus money each year in company stock. Her bonus has been $8000
Please show in-depth spreadsheet solution
Samara, an engineer working for GE, invested her bonus money each year in company stock. Her bonus has been $8000 each year for the past 6 years (i.e., at the end of years 1 to 6). At the end of year 7, she sold the stock for $52,000 to buy a condo; she purchased no stock that year. In years 8 to 10, she again invested the $8000 bonus. Samara sold all of the remaining stock for $28,000 immediately after the investment at the end of year 10. (a) Determine the number of possible rate of return values in the net cash flow series using the two sign tests. (b) Determine the external rate of return by hand, using the modified rate of return approach with an investment rate of 12% per year and a borrowing rate of 8%. (c) Find the external rate of return by spreadsheet using the ROIC approach with an investment rate of 12% per year. Samara, an engineer working for GE, invested her bonus money each year in company stock. Her bonus has been $8000 each year for the past 6 years (i.e., at the end of years 1 to 6). At the end of year 7, she sold the stock for $52,000 to buy a condo; she purchased no stock that year. In years 8 to 10, she again invested the $8000 bonus. Samara sold all of the remaining stock for $28,000 immediately after the investment at the end of year 10. (a) Determine the number of possible rate of return values in the net cash flow series using the two sign tests. (b) Determine the external rate of return by hand, using the modified rate of return approach with an investment rate of 12% per year and a borrowing rate of 8%. (c) Find the external rate of return by spreadsheet using the ROIC approach with an investment rate of 12% per year
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