What is the investor rate of return

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1. Management is considering developing new computer software. The cost of development will be $675,000, and management expects the net cash flow from sale of the software to be $195,000 for each of the next six years. If the discount rate is 14 percent, What is the IRR on this project? (Round answer to 3 decimal places,e.g. 15.221.)

IRR: _______ %

2. An investor buys $16 thousand dollars of ABT stock at $20 per share, using 58% initial margin. The broker charges 6% APR compounded daily on the loan, and requires a 35% maintenance margin. The stock pays $0.63 per share dividend each year. If the stock is sold at the end of the year at $23 per share, what is the investor's rate of return?

Reference no: EM131889804

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