Question details

The Ogden Corporation makes an investment of $25,000, which yields the following
$ 8.00

The Ogden Corporation makes an investment of $25,000, which yields the following
cash flows:

Year

Cash Flow

1................

$ 5,000

2................

5,000

3................

8,000

4................

9,000

5................

10,000

         a.      What is the present value with a 9 percent discount rate (cost of capital)?

         b.      What is the internal rate of return? Use the interpolation procedure shown in this chapter.

         c.      In this problem would you make the same decision in parts a and b

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