Question

2. Initial Outlay -$5,000 Year 1 $3,000 Year 2 $3,500 Year 3 $3,200 Year 4 $2,800 Year 5 $2,500

a. What is the PI if the discount rate is 20%? Round to the second decimal place. Type only numbers without any unit ($, %, etc.)

b. What is the NPV if the discount rate is 20%? Round to the second decimal place. Type only numbers without any unit ($, %, etc.) If there are multiple answers, then type NA.

c. What is the IRR if the discount rate is 20%? Answer in the percent format. Round to the hundredth decimal place. Type only numbers without any unit ($, %, etc.)

d. What is the EAA if the discount rate is 20%? Round to the penny. Type only numbers without any unit ($, %, etc.)

Answer 1

Hello Sir/ Mam

Given that:

(a)

Time	Amount	PVF	PV
0	-$5,000.00	1.000000	-$5,000.00
1	$3,000.00	0.833333	$2,500.00
2	$3,500.00	0.694444	$2,430.56
3	$3,200.00	0.578704	$1,851.85
4	$2,800.00	0.482253	$1,350.31
5	$2,500.00	0.401878	$1,004.69
PVCI			$9,137.41
PI			1.8275

(b)

Time	Amount	PVF	PV
0	-$5,000.00	1.000000	-$5,000.00
1	$3,000.00	0.833333	$2,500.00
2	$3,500.00	0.694444	$2,430.56
3	$3,200.00	0.578704	$1,851.85
4	$2,800.00	0.482253	$1,350.31
5	$2,500.00	0.401878	$1,004.69
NPV			$4,137.41

(c)

Time	Amount
0	-$5,000.00
1	$3,000.00
2	$3,500.00
3	$3,200.00
4	$2,800.00
5	$2,500.00
IRR	55.23%

(d)

I hope this solves your doubt.

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