SOLUTION: 24. You invest $1 million in a business venture. It promises to pay you back $120,000 per year the first 10 years, then $50,000 per year for the next 10 years.
(a) What return (IR
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(a) What return (IR
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Question 729325: 24. You invest $1 million in a business venture. It promises to pay you back $120,000 per year the first 10 years, then $50,000 per year for the next 10 years.
(a) What return (IRR) is the project promising?
(b) If your required rate of return is 6.25%, what is the current value (NPV) of the whole project?
(c) If your required rate of return is 7%, what is the profitability index (PI) for this project? Answer by lynnlo(4176) (Show Source):
(