Answered: please determine the rate of return of…

please determine the rate of return of the cash flows shown in the table below. Year 0 1 2 3 4 Cash flow -3,000 1,000 900 900 900

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

ChapterA2: Comprehensive Case Problems

Section: Chapter Questions

Problem 4.6CCP

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Concept explainers

Operating Cash Flows

A cash flow statement (CFS) helps the company to know the amount of cash at its disposal, the activities that lead to earning cash, and the activities which require cash expenditure for a particular period. The statement represents the liquidity of the company.

Question

please determine the rate of return of the cash flows shown in the table below.

Year 0 1 2 3 4

Cash flow -3,000 1,000 900 900 900

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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