Question

Internal rate of return  Peace of​ Mind, Inc.​ (PMI) sells extended warranties for durable consumer goods...

Internal rate of return  Peace of​ Mind, Inc.​ (PMI) sells extended warranties for durable consumer goods such as washing machines and refrigerators. When PMI sells an extended​ warranty, it receives cash up front from the​ customer, but later PMI must cover any repair costs that arise. An analyst working for PMI is considering a warranty for a new line of​ big-screen TVs. A consumer who purchases the ​2-year warranty will pay PMI ​$ 201. On​ average, the repair costs that PMI must cover will average ​$103 for each for the​ warranty's 2 years. If PMI has a cost of capital of 7 ​%, should it offer this warranty for​ sale?

1. The internal rate of return​ (IRR) for this project is? ​

(Round to two decimal​ places.)

2. The NPV of this project is ​$ nothing? .

help!

​(Round to two decimal​ places.)

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • How can you use Bayes’ theorem in light of new information? In Bayes’ theorem, how does...
    asked 1 minute ago
  • Which of the following is not one of the four states of a working file? Unchanged,...
    asked 4 minutes ago
  • Assume we have CPU instructions that look like this: load register, address save register, address Where...
    asked 17 minutes ago
  • What is the difference between the following two declarations? char array[] = “Hello World”; char *array...
    asked 33 minutes ago
  • Discuss knowledge and understanding gleaned from The Least Dangerous Assumption and Strategies for Presuming Competence. How...
    asked 33 minutes ago
  • Exercise 13-20 (LO13-3) The owner of Maumee Ford-Volvo wants to study the relationship between the age...
    asked 35 minutes ago
  • Scenario The Department of Administrative Services (DAS) provides a number of services to other departments in...
    asked 43 minutes ago
  • Linear Regressions The number of newly reported crime cases in a county in New York State...
    asked 48 minutes ago
  • Specialty courts have been developed for various categories of crimes and offenders (e.g., mental health, substance...
    asked 52 minutes ago
  • An air-track cart with mass m=0.40kg and speed v0=1.2m/s approaches two other carts that are at...
    asked 52 minutes ago
  • Write a program in C# that reverses a collection and removes elements that are divisible by...
    asked 55 minutes ago
  • A gas pipeline with the thickness of 4mm is to be joint together by using welding...
    asked 1 hour ago