Suppose you are offered $8,700 today but must make the following payments: Year Cash Flows 0...

Suppose you are offered $8,700 today but must make the following payments:

Year Cash Flows

0 $ 8,700

1 −3,900

2 −2,900

3 −2,300

4 −1,800

a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

b. If the appropriate discount rate is 10 percent, should you accept this offer?

c. If the appropriate discount rate is 20 percent, should you accept this offer?

d-1.	What is the NPV of the offer if the appropriate discount rate is 10 percent?
d-2.	What is the NPV of the offer if the appropriate discount rate is 20 percent?

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Expert Solution

jeff jeffy answered 2 years ago

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