Jan, Fran, Nan, and Dan are looking for new investment opportunities. They have each proposed...
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Accounting
Jan, Fran, Nan, and Dan are looking for new investment opportunities. They have each proposed different investment plans with the cash flows shown in the table below. Assume that MARR=12% for all scenarios.
Table 2: Cash Flows for Question 3
n | Jan | Fran | Nan | Dan |
0 | -$150 | -$100 | -$600 | $200 |
1 | 180 | 60 | 2,000 | -800 |
2 | 36 | 0 | -1,500 | 200 |
3 | -- | 40 | -- | 400 |
4 | -- | 30 | -- | 600 |
5 | -- | 20 | -- | 800 |
i* | X | 17.70% | 13.96%, 119.37% | 73.10%, 243.73% |
- Find all possible s for Jans project. You may use any method you wish.
- Classify Nans and Dans investments as either pure or mixed. Support your answers by performing all appropriate tests.
- Find the true IRR for Nans project.
- Find the MIRR for Dans project. Assume that the cost of capital is 14%.
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