Jenco Electric manufactures washdown adjustable speed drives in open loop, encoderless, and closedloop servo configurations. The net cash flow associated with one phase of the production operation is shown below. (a) Determine the possible rate of return values according to the rule of signs. (b) Determine the changes of sign in the cumulative cash flow series. What does this mean? (c) Write the PW relation to determine i* values. Use the IRR function to display it. Year Net Cash Flow, $ 0 −40,000 1 32,000 2 18,000 3 −2000 4 −1000
Jenco Electric manufactures washdown adjustable speed drives in open loop, encoderless, and closedloop servo configurations. The net cash flow associated with one phase of the production operation is shown below. (a) Determine the possible rate of return values according to the rule of signs. (b) Determine the changes of sign in the cumulative cash flow series. What does this mean? (c) Write the PW relation to determine i* values. Use the IRR function to display it. Year Net Cash Flow, $ 0 −40,000 1 32,000 2 18,000 3 −2000 4 −1000
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 1P
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Question
Jenco Electric manufactures washdown adjustable
speed drives in open loop, encoderless, and closedloop
servo configurations. The net cash flow associated
with one phase of the production operation
is shown below.
(a) Determine the possible
according to the rule of signs.
(b) Determine the changes of sign in the cumulative
cash flow series. What does this mean?
(c) Write the PW relation to determine i* values.
Use the IRR function to display it.
Year Net Cash Flow, $
0 −40,000
1 32,000
2 18,000
3 −2000
4 −1000
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