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Corporate Finance, calculating annual returns

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A. Use the data given to calculate annual returns for Bartman, Reynolds, and the Market Index, and then
calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the
beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or
loss, and dividing the result by the beginning price. Assume that dividends are already included in the index.
Also, you cannot calculate the rate of return for 1999 because you do not have 1998 data.)

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Solution Summary

Corporate finance calculation of annual returns for Bartman, Reynolds and the Market Index.

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Could you do problems 6-20 and 6-38 orn give a hint on how to complete?

(See attached file for full problem description)

Here are the cash flows for two mutually exclusive projects:

Project C0 C1 C2 C3
A ($20,000) $8,000 $8,000 $8,000
B ($20,000) 0 0 $25,000

a. At what interest rates would you prefer project A to B?

b. What is the IRR of each project?

Growth Enterprises believes its latest project, which will cost $80,000 to install, will generate a perpetual
growing stream of cash flows. Cash flow at the end of this year will be $5,000 and cash flows in future
years are expected to grow indefinitely at an annual rate of 5 percent.

a. If the discount rate for this project is 10 percent, what is the project NPV?

b. What is the project IRR?

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