Solutions to Chapter 1

IRR = Discount rate (r) which is the solution to the following equation: ( r = IRR = 15.34%. You can solve for IRR using a financial calculator by entering: PV = (()3000; n = 6; FV = 0; PMT = 800; and then compute i. Since the IRR is 15.34%, this is the highest discount rate before project NPV turns negative. Payback period = $2,500/$600 = 4 ... ................
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