A small business promises a profit of $800 on an initial investment of $2000 after 4 years. 1. a) Calculate IRR. b) Would you invest in this business if the market rate compounded annually.(mr=9%) A project requiring an initial investment of $10 000 is guaranteed to produce a return of $13 000 in 5 years. 2. Use NPV method to determine whether this investment is worthwhile if the market rate is 5% compounded annually.

A small business promises a profit of $800 on an initial investment of $2000 after 4 years. 1. a) Calculate IRR. b) Would you invest in this business if the market rate compounded annually.(mr=9%) A project requiring an initial investment of $10 000 is guaranteed to produce a return of $13 000 in 5 years. 2. Use NPV method to determine whether this investment is worthwhile if the market rate is 5% compounded annually.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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