Consider the cashflow (n = 10 years, MARR = e = Cash Flow A Investment P 180,000 Revenues P 350,000 per year 14%) Expenses P 400,000 per year for the first 3 years, decreasing by P 50,000 per year thereafter a. Calculate the Internal Rate of Return (IRR) of each project. b. Calculate the External Rate of Return (ERR) of each project. Salvage Value P 40,000

Consider the cashflow (n = 10 years, MARR = e = Cash Flow A Investment P 180,000 Revenues P 350,000 per year 14%) Expenses P 400,000 per year for the first 3 years, decreasing by P 50,000 per year thereafter a. Calculate the Internal Rate of Return (IRR) of each project. b. Calculate the External Rate of Return (ERR) of each project. Salvage Value P 40,000

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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