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NINJA Question –
As of right now, I am struggling with two different areas within the Financial Management Section of the BEC Ninja book.
Page 33-Application example
Why would I divide the initial cost by the present value of annuity of $1 factor at five years? Shouldn’t I multiply the cash flows out and then divide by 5 to get the average?
Page 44-Application example
The answer states that 6.44% is the effective interest rate. However, I’m getting 7.5%. (15000/250000)
I’m hoping someone who has this book and/or a helpful Ninja can break down the answer for me because I seem to be missing something! ;(
I appreciate the help…
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