revision mock

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December 9, 2015 at 2:43 am #289393
kebeori
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A project requires an investment of $24,000 at time 0, and generates an inflow of $5,000 per year for 8 years (with the first inflow occurring in one years time).

What is the Internal Rate of Return (to the nearest %)?
December 9, 2015 at 8:41 am #289467
John Moffat
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The 8 year annuity factor must be 24,000 / 5,000 = 4.800

Then look along the 8 year row in the annuity tables to see which interest rate gives 4.800
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