Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 23

Julie received a $50 bill for her birthday at the end of January. At the end of February, she spent this $50 and an additional $150 to buy clothes. Her parents then gave her $50 and $125 at the end of March and April, respectively, as she prepared to go to summer school and needed the clothes. Her conclusion was that over the 4 months, she had received $25 more than she spent. Determine if Julie has a multiple rate of return situation for these cash flows. If so, determine the multiple rates and comment on their validity. The cash flow values are as follows: