IPS Return Objective Calculation
CFAI Reading 14 Q13Aii
Need a little help here. How does the required rate of return turn out to be 4.427%? This should be a simple CF calculation that I imagine would be calculated as follows:
PV: -1,235,000
PMT: -26,000
N: 18
FV: 2,000,000/0.6=3,333,333
I ==> 4.32%
Am I thinking of this wrong? Thanks in advance. |