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Internal rate of return Peace of Mind, Inc. (PMI) sells extended warranties for durable consumer goods such as washing machines and refrigerators. When PMI sells an extended warranty it receives cash up front from the customer, but later PMI must cover any repair costs that arise. An analyst working for PMI is considering a warranty for a new line of big-screen TVs. A r who purchases the 2-year warranty will pay PMI $200. On average, the repair costs that PMI must cover will average $106 for each for the warrantys 2 years. If PMI has a cost of capital of 7%, should it offer this warranty for sale?Internal rate of return Peace of Mind, Inc. (PMI) sells extended warranties for durable consumer goods such as washing machines and refrigerators. When PMI sells an extended warranty, it receives cash up front from the customer, but later PMI must cover any repair costs that arise. An analyst working for PMI is considering a warranty for a new line of big-screen TVs. A consumer who purchases the 2-year warranty will pay PMI $200. On average, the repair costs that PMI must cover will average $106 for each for the warrantys 2 years. If PMI has a cost of capital of 7%, should it offer this warranty for sale? The internal rate of return (IRR) for this project is 3.97%. (Round to two decimal places.) The NPV of this project is $8.35. (Round to two decimal places.)

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Home Page Layout FormulasData Review View dd-Ins Define Name PUse in Formula Trace Precedents Show Formulas Trace Dependents Error Checking Remove Arrows Calculate Now Insert Autosum Recently Financial Logical Tet Date & Lookup & Math More Function Watch Calculation Calculate Sheet wndow ? Create from Selection Defined Names Used | Evaluate Formula Time Reference ▼ & Tng Functions ▼ Manager options . Function Library Formula Auditing Calculation K72 57 58 59 60 61 62 63 64 65 CF 200 -106 106 IRR 3.97% RATE NPV 7% $ 8.35 67 68 69 70 71 72 73 74 75 11 YES AS NPV IS POSITIVE, COMPANY SHOULD GO FOR IT : IRRnpv RATION PBP ARR ( external rate MIRR NPV İRR REPLACEMENT S HPR GMAM CEAC MACRS RATIOCASHBUDGET wacc BOND EPS EBIT REPLACEMENT STats 福 130% 04:53

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  • Internal rate of return  Peace of​ Mind, Inc.​ (PMI) sells extended warranties for durable consumer goods...

    Internal rate of return  Peace of​ Mind, Inc.​ (PMI) sells extended warranties for durable consumer goods such as washing machines and refrigerators. When PMI sells an extended​ warranty, it receives cash up front from the​ customer, but later PMI must cover any repair costs that arise. An analyst working for PMI is considering a warranty for a new line of​ big-screen TVs. A consumer who purchases the 2​-year warranty will pay PMI ​$200. On​ average, the repair costs that PMI...

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