Determine rate of return, A company has the opportunity to

Determine rate of return

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Reference no: EM131505908

Question: A company has the opportunity to take over a redevelopment project in an industrial area of a city. No immediate investment is required, but it must raze the existing buildings over a four-year period and, at the end of the fourth year, invest $2,400,000 for new construction. It will collect all revenues and pay all costs for a period of 10 years, at which time the entire project, and properties thereon, will revert to the city. The net cash flows are estimated to be as follows:

Tabulate the PW versus the interest rate and determine whether multiple IRRs exist. If so, use the ERR method when ∈ = 8% per year to determine a rate of return.

Reference no: EM131505908

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