Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results: EOY Cash Flow 0 -$70,000 1 $20,000 2 $19,000 3 $18,000 4 $17,000 5 $16,000 6 $15,000 7 $14,000 8 $13,000 9 $12,000 10 $11,000 11 $10,000 12 $9,000 13 $8,000 14 $7,000 15 $6,000 16 $5,000 17 $4,000 18 $3,000 19 $2,000 20 $1,000

Economics Today and Tomorrow, Student Edition
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Chapter6: Saving And Investing
Section6.2: Investing: Taking Risks With Your Savings
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Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results:

EOY

Cash Flow

0

-$70,000

1

$20,000

2

$19,000

3

$18,000

4

$17,000

5

$16,000

6

$15,000

7

$14,000

8

$13,000

9

$12,000

10

$11,000

11

$10,000

12

$9,000

13

$8,000

14

$7,000

15

$6,000

16

$5,000

17

$4,000

18

$3,000

19

$2,000

20

$1,000


Assume MARR is 20 percent per year. Based on an internal rate of return analysis:

Determine the investment’s worth: enter percentages rounded to 1 decimal place %

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