Question: The engineering design and testing group for H&M Corp. does contract-based work for automobile manufacturers throughout the world. During the last 4 years, the net

The engineering design and testing group for H&M Corp. does contract-based work for automobile manufacturers throughout the world. During the last 4 years, the net cash flows for contract payments have varied widely, as shown below, primarily due to a large manufacturer’s inability to pay its contract fee. Show weather the project is justified or not?
J year Cash ($ 1,000) 0 flows +3,000 1 -700 2 -7,100

Determine the maximum number of i* values that may satisfy the rate of return(ROR)
Find the External Rate of Return (EROR) by modified rate of return (MIRR) if minimum attractive return (MARR)= 9.5% , ib=9%, and ii =12.5%
Find the EORR by the ROIC (Rate on Invested Capital) method if MARR= 9.5 % and ii= 12.5

J year Cash ($ 1,000) 0 flows +3,000 1 -700 2 -7,100 3 5,800 4 5,600

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The maximum number of i values that may satisfy the ROR is four This is because the ROR is the sum of the cash flows divided by the initial investment The cash flows for the four years are 3000 700 71... View full answer

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