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of 8%. (After using the procedure, use the MIRR function to confirm your answer.) 0 4 Year 7.43 For the NCF.S-9000 +4100 2000700012,000 +700 +800 nal rat ital ap year 7.40 Samara, an engineer working for GE, invested her bonus money each year in company stock. Her bonus has been $8000 each year for the past 6 years (i.e., at the end of years 1 to 6). At the end of year 7, she sold the stock for $52,000 to buy a condo; she purchased no stock that year. In years 8 to 10, she again invested the $8000 bonus. Samara sold all of the remaining stock for $28,000 imme- diately after the investment at the end of year 10. Determine the number of possible rate of re- turn values in the net cash flow series using (a) 7.44 Five ye vestme produc Howev paign 4 opment ear externa and an is 44.1 the two sign tests. (b) Determine the external rate of return by hand, using the modified rate of return ap- proach with an investment rate of 12% per year and a borrowing rate of 8%. Find the external rate of return by spread- sheet using the ROIC approach with an in- vestment rate of 12% per year. (d) Enter the cash flows into a spreadsheet, and use the IRR function to find the i value. You should get the same value as the ROIC in part (c). Ex- plain why this is so, given that the investment rate is 12% per year. (Hint: Look carefully at the column labeled "Future worth, F, $" when you Ye solved part (c) using the spreadsheet.) wagelok Co. of Solon, Ohio, makes variable area Howmeters (VAFs) that measure liquid and gas flow rates by means of a tapered tube and float. If tooling and setup costs were $400,000 in year 0 and an ad ditional $190,000 in year 3, determine the external rate of return using the modified rate of return ap- Bonds 7.45 What is gage bo of 8%. (After using the procedure, use the MIRR function to confirm your answer.) 0 4 Year 7.43 For the NCF.S-9000 +4100 2000700012,000 +700 +800 nal rat ital ap year 7.40 Samara, an engineer working for GE, invested her bonus money each year in company stock. Her bonus has been $8000 each year for the past 6 years (i.e., at the end of years 1 to 6). At the end of year 7, she sold the stock for $52,000 to buy a condo; she purchased no stock that year. In years 8 to 10, she again invested the $8000 bonus. Samara sold all of the remaining stock for $28,000 imme- diately after the investment at the end of year 10. Determine the number of possible rate of re- turn values in the net cash flow series using (a) 7.44 Five ye vestme produc Howev paign 4 opment ear externa and an is 44.1 the two sign tests. (b) Determine the external rate of return by hand, using the modified rate of return ap- proach with an investment rate of 12% per year and a borrowing rate of 8%. Find the external rate of return by spread- sheet using the ROIC approach with an in- vestment rate of 12% per year. (d) Enter the cash flows into a spreadsheet, and use the IRR function to find the i value. You should get the same value as the ROIC in part (c). Ex- plain why this is so, given that the investment rate is 12% per year. (Hint: Look carefully at the column labeled "Future worth, F, $" when you Ye solved part (c) using the spreadsheet.) wagelok Co. of Solon, Ohio, makes variable area Howmeters (VAFs) that measure liquid and gas flow rates by means of a tapered tube and float. If tooling and setup costs were $400,000 in year 0 and an ad ditional $190,000 in year 3, determine the external rate of return using the modified rate of return ap- Bonds 7.45 What is gage bo

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