What is the before tax irr on each investment

Assignment Help Financial Management

Reference no: EM131511764

Two investments have the same expected returns:

Year BTCF 1 BTCF 2

1 $5,000 $2,000

2 $10,000 $4,000

3 $12,000 $1,000

4 $15,000 $5,000

Sale $120,000 $180,000

Investment 1 requires an out lay of $110,000 and investment 2 requires an outlay of $120,000.

a. What is the before tax IRR on each investment?

b. If the before tax IRR were partitioned based on the cash flow from operations and the cash flow from the sale, what would be the before tax IRR for each?

c. What do the partitions above mean?

Reference no: EM131511764

Questions Cloud

Capital adequacy ratio pertains : Capital adequacy ratio pertains to which of the following entities?

Define the components of the camels criteria : Define the components of the CAMELS criteria. Explain how a CAMELS rating is calculated.

Legal and regulatory risk : By efficiently diversifying, an investor can: Legal/Regulatory Risk is..

What is the estimated physical inventory : What is the estimated physical inventory?

What is the before tax irr on each investment : Two investments have the same expected returns: What is the before tax IRR on each investment?

Prepare the general journal entry : On April 30, 2016, Alpha Company issued $100,000 of 12%, 10-year bonds. Use this information to prepare the General Journal entry for the April 30, 2016

How sensitive is ocf to changes in quantity sold : Consider a four-year project with the following information: Initial fixed asset investment = $400,000; How sensitive is OCF to changes in quantity sold?

Requirement measure in the international banking sector : What does the capital adequacy requirement measure in the international banking sector?

What should be ranyards current stock price : Ranyard's beta is 1.09, and the last dividend per share paid was $4.15. What should be Ranyard's current stock price?

User Account

All Pages