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

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

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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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