Chapter 8 Self-Study Questions
| 1. | $287.14 |
| 4. | $48.10 |
| 6. | PW(0%) = $4000, PW(2%) = $2750.68, PW(4%) = $1664.08, PW(6%) = $715.85, PW(8%) = –$114.29, PW(10%) = –$843.27
Because PW(6%) > 0 and PW(8%) < 0, the IRR is between 6% and 8%. Note that because PW(8%) is closer to zero than PW(6%), the IRR is closer to 8% than 6%. |
| 9. | 7.8 years |
| 15. | CE(12%) = 300,000/0.12 = $2,500,000 |
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