Calculate the external rate of return

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Reference no: EM13976854

A public private initiative in Texas will significantly expand the wind generated energy throughout the state. The cash flow for one phase of the project involving Centrals point Energy, a transmission utility company, is shown. Given reinvestment rate of 14% per year for excess funds and 10% per year for borrowing rate for extra funds, determine: given MARR= 12%

Year Net Cash Flow

0 -50000

1 +22000

2 +38000

3 -2000

4 -1000

5 +5000

a) How many number of ROR values is expected and why?

b) Calculate the external rate of return.

c) Is the project economically viable?

Reference no: EM13976854

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