Iggies Used Cars will sell you a 2002 Suzuki Aerio for $3,000 with no money down. You agree to make weekly payments of $40 for two years, beginning one week after you buy the car. What is the EAR of this loan?
The Rebus Co. is trying to decide between the following two mutually exclusive projects:
Cash Flows
Year Project I Project II
0 -$18,000 $-12,000
1 $8,500 $6,500
2 $9,000 $6,000
3 $9,500 $7,000
The only requirement the company has is that any project that is accepted must produce a minimum rate of return of 11%.
Calculate the payback period, discounted payback period, IRR, and NPV
Year Project I Project II
Payback (years)
Discounted Payback
IRR
NPV
