Answer to Question #55794 in Other Economics for Antornette Love

Question #55794
For the cashflows, the function for evaluating the ROR is: (Cashflow) Year Cashflow 0 -$500 1 0 2 0 3 400 4 -50 5 300 a. -500 - 50(P/F, i, 4) + 400(P/F, i, 3) + 300 (P/F,i,5) = 0 b. -500 - 50(P/F, i, 2) + 400(P/F, i, 1) + 300 (P/F,i,3) = 0 c. 500 - 50(P/F, i, 4) + 400(P/F, i, 3) + 300 (P/F,i,5) = 0 d. None of the above
Expert's answer
Year Cashflow
0 -$500
1 0
2 0
3 400
4 -50
5 300
For the cashflows, the function for evaluating the ROR is:
ROR = -500 - 50(P/F, i, 4) + 400(P/F, i, 3) + 300 (P/F,i,5) = 0

So, the right answer is a. -500 - 50(P/F, i, 4) + 400(P/F, i, 3) + 300 (P/F,i,5) = 0

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