For the net cash flow series shown, (a) apply the two rules of sign change, (b) find the external rate of return using the ROIC method atan investment rate of 15% per year, and (c) determine an i* using the IRR function with and without the ROIC determined in part (b).AYear1Net Cash Flow, $248,0001220,000-90,00050,0004364-10,000According to the rule of signs, there can be up to threev rate of return values.According to the cumulative cash flow test, the i*value is inconclusiveThe external rate of return according to the ROIC method is%.The rate of return using the IRR function is-27| %.

20,000 -90,000 50,000 -10,000 2 4 According to the rule of signs, there can be up to three |rate of return values. According to the cumulative cash flow test, the i"value is inconclusive The external rate of return according to the ROIC method is | %. The rate of return using the IRR function is -27 %. mt n J6

20,000 -90,000 50,000 -10,000 2 4 According to the rule of signs, there can be up to three |rate of return values. According to the cumulative cash flow test, the i"value is inconclusive The external rate of return according to the ROIC method is | %. The rate of return using the IRR function is -27 %. mt n J6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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