Question

1 of 2 CHAPTER7 RATE OF RETURN ANALYSIS Problem1 An investment of $100,000 today, will pay 10 annual payments of $15,000 each. Compute the rate of return on this investment to the second decimal place. Problem 2 Determine the ROR for a project that has an initial cost of $82,000 and would provide positive cash flows of S12,000 the first year, $14,000 the second year, $16,000 the third year, $18,000 the fourth year, $20,000 the fifth year, and S15,000 the sixth year Problem 3 Given the cash flows described in table below. Determine the ROR Year 0 1-2 3-5 Cash flow$12,300 4,000 Problem4 Tara purchases a 20-year, 5 percent savings bond with a face value of S10,000 at a premium price of S1 1,000 She gets the dividend paid yearly. Determine the rate of return on the bond if the bond is kept till maturity. Problem5 An equipment costing $60,000 is being evaluated for a production process at Don Jones Co. The expected benefits per yearis $4,500 and estimated salvage value is $20,000. Determine the rate of return the company can get in this equipment proposal. Equipment life 20 years.

Answer 1