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(show work) 2 If you deposit $1,000 now and are promised payments of $500 three years from...

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Mechanical Engineering

(show work)

2 If you deposit $1,000 now and are promised payments of $500three years from now and $1,500 five years from now, the equationthat will yield the correct rate of return is:

   A)   -1000 = 500(P/F,i,3) +1500(P/F,i,5)

   B)   0 = 1000 + 500(P/F,i,3) +1500(P/F,i,5)

   C)   1000 = -500(P/F,i,3) -1500(P/F,i,5)

   D)   0 = -1000 + 500(P/F,i,3) +1500(P/F,i,5)

3 For the equation: 5,000 = 1,000(P/F,i,1) - 2,000(P/F,i,2) +7,000(P/F,i,7) + 7,000(P/F,i,9), the number of possible rate ofreturn values is:

   A)   1

   B)   2

   C)   3

   D)   4

4there is more than one sign change in the net cash flow of arate of return equation, the possible rate of return values willfall in the range of:

   A)   minus infinity to plus infinity

   B)   minus 100% to plus infinity

   C)   minus 100% to plus 100%

   D)   minus infinity to plus 100%

5 When multiple rate of return values are possible for a rate ofreturn equation, one way to come up with a single value whichsatisfies the equation is:

   A)   Solve for the internal rate ofreturn

   B)   Use the project net investmentprocedure

   C)   Eliminate all rate of return valuesabove 100%

   D)   Eliminate all rate of return valuesbelow 0%

Answer & Explanation Solved by verified expert
3.9 Ratings (733 Votes)
1 correct answer is A 0 1000 500pfi31500 pFi5 2The number of possible rate return value is c 3 Because more than 1    See Answer
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