Calculate the err of this project

Assignment Help Mechanical Engineering

Reference no: EM131356457

Samiran has entered into an agreement to develop and maintain a computer program for symbolic mathematics. Under the terms of the agreement, he will pay 9 000 000 rupees in royalties to the investor at the end of the fifth, tenth, and fifteenth years, with the investor paying Samiran 4 500 000 rupees now, and then 6 500 000 rupees at the end of the twelfth year.

Samiran AIARR for this type of investment is 20%. Calculate the ERR of this project. Should he accept this agreement, on the basis of these disbursements and receipts alone? Are you sure that the ERR you calculated is the only ERR? Why ? Are you sure that your recommendation to Samiran is correct? Justify your answer.

Reference no: EM131356457

Questions Cloud

Assuming the gross method of accounting for cash discounts : Tradewinds Company sold 100 fans to Windwards Company on November 17, 2015. The fans has a list price of $500 each, but Windwards was given a 30% trade discount. The terms of the sale were 2/10, n/30. Prepare the journal entry to record the sale on N..

Pick a psychological disorder of your choosing : Pick a psychological disorder of your choosing. Describe its symptoms and then fully discuss appropriate treatment for that disorder from two different treatment perspectives. For the treatment you pick, look in the filesthat I uploaded for treatm..

Determine the revenue retrieval for the gf deluxe : Green Forever, a manufacturer of lawn equipment, has preliminary drawings for two grass trimmer designs. Specifically, she is to use the following data to help the company determine The revenue retrieval for the GF Deluxe

Get income tax deduction for his planned : Muhammad, your client, comes to your office. He is from Pakistan and is an avid cricket player. His annual salary and bonus/incentive compensation income, earned as the president of an engineering firm in Virginia, is usually $2 million. He is in the..

Calculate the err of this project : Are you sure that the ERR you calculated is the only ERR? Why ? Are you sure that your recommendation to Samiran is correct? Justify your answer.

Prepare journal entry to record the transfer on the books : The Mountain High Ice Cream Company transferred $50,000 of accounts receivable to Prudential Bank. The transfer was made without resource. Prudential Bank remits 90% of the factored amount to Mountain High and retains 10%. Prepare the journal entry t..

Alex anderson recently won lottery : Alex Anderson recently won a lottery and has the option of receiving one of the following three prizes: Assuming an interest rate of 6%, which option should Alex choose?

Prepare a lower level data flow diagram for cash receipt : Redraw the appropriate part of given Figure, assuming a lockbox system is used. Also, prepare a lower-level data flow diagram for the cash receipts function, using the same assumption.

What is his irr for this investment : Jerry has an opportunity to buy a bond with a face value of S10 000 and a coupon rate of 14%, payable semiannually.

User Account

All Pages