Estimated values of the yearly atcf

Reference no: EM13826129

Problem:

The estimated values of the yearly ATCF (after tax cash flows) of a Project are given in the Table below. The duration of the Project is six years. The initial cost of the Project is $2,800,000. MARR (the minimum attractive rate of return) is 12%.

End of year	1	2	3	4	5	6
ATCF	$620,000	$620,000	$620,000+$X	$620,000	$620,000	$620,000+$Y

Determine:

the value of X that would make the IRR (internal rate of return) of the Project equal to 15% if Y = 3X
the IRR (internal rate of return) of the Project if X = 400,000 and Y= 1,000,000
the value of X that would make the ERR (external rate of return) of the Project equal to 15% if Y = 800,000
the ERR (external rate of return) of the Project if X = Y = 800,000
the value of X that would make the equivalent uniform annual value of the Project cash flow equal to $980,000 if Y = 4X

Additional Information:

This question is basically belongs to Finance as well as it explains about computation of internal rate of return, external rate of return and annual value of cash flow for a project.

Reference no: EM13826129

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