Calculate the rate of return on an investment with the cash flow displayed in following table. Please explain your…

Question:

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Calculate the rate of return on an investment with the cash flow displayed in following table. Please explain your work in detail.

C-40,0001-5,5001-5,000 1-4,5001-4,000 1-3,500

3

4

5

0

1

C: Cost, I: Income, L: Salvage Value

Please be careful about the signs. Costs have negative but income and Salvage Value have positive signs.

2

L-$25,000

Expert Answer:

Answer rating: 100% (QA)

SOLUTION To calculate the rate of return on the investment we need to use the net present value NPV

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