6. Wabash Landing, Inc. is looking at buying a new riverboat. The cost of the boat...

Question

Question

Answer 1

Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

20,000=4600/1.0x+5800/1.0x^2+6300/1.0x^3+6800/1.0x^4+7210/1.0x^5

Hence x=irr=15%(Approx).

Answer 2

Similar Homework Help Questions

DragonFlights, Inc. is planning on purchasing a new flying dragon for their new route to Volantis....

DragonFlights, Inc. is planning on purchasing a new flying dragon for their new route to Volantis. The cost of the dragon is $10.3 million. On average the dragons are operational for about 10 years. Dragon will be retired after 10 years with no salvage value. Marketing department of DragonFlights has conducted consumer surveys and market research in order to determine market demand and estimate future sales. This research has cost them $100,000. Based on the results of market studies management...
Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large,...

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSS). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $5.1 million in anticipation of using it as a toxic dump site for waste chemicals, but it...