A four-year project has an initial cost of $20 000, net annual cash inflows of $10 000, and a salvage value of $5 000. Which of the following gives the project's internal rate of return (i*)? -20 000(F/P, i*, 4) + 10 000 + 5 000 = 0 -20 000(A/P, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0 -20 000(A/F, i*, 4) + 10 000 + 5 000(A/P, i*, 4) = 0 -20 000(P/F, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0
A four-year project has an initial cost of $20 000, net annual cash inflows of $10 000, and a salvage value of $5 000. Which of the following gives the project's internal rate of return (i*)? -20 000(F/P, i*, 4) + 10 000 + 5 000 = 0 -20 000(A/P, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0 -20 000(A/F, i*, 4) + 10 000 + 5 000(A/P, i*, 4) = 0 -20 000(P/F, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A four-year project has an initial cost of $20 000, net annual cash inflows
of $10 000, and a salvage value of $5 000. Which of the following gives
the project's internal rate of return (i*)?
-20 000(F/P, i*, 4) + 10 000 + 5 000 = 0
-20 000(A/P, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0
-20 000(A/F, i*, 4) + 10 000 + 5 000(A/P, i*, 4) = 0
O -20 000(P/F, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffc4b33cb-db9c-4c04-ab11-b1e9878be526%2F48bd0504-3f2c-4581-aa03-c9accbb6486e%2F311sn1i_processed.png&w=3840&q=75)
Transcribed Image Text:A four-year project has an initial cost of $20 000, net annual cash inflows
of $10 000, and a salvage value of $5 000. Which of the following gives
the project's internal rate of return (i*)?
-20 000(F/P, i*, 4) + 10 000 + 5 000 = 0
-20 000(A/P, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0
-20 000(A/F, i*, 4) + 10 000 + 5 000(A/P, i*, 4) = 0
O -20 000(P/F, i*, 4) + 10 000 + 5 000(A/F, i*, 4) = 0
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