1. IRR is also used for project and capital budgeting decisions. What does IRR tell a manager about a investment or project?
2. What is the future value of a $1000/month deposit at the end of 5 years that grows at a rate of $50/month, starting with your second deposit (which is $1,050). Assume that your initial deposit occurs at the end of your first month. Use 9% nominal annual interest compounded monthly.
3. If China will go from 17 million to 190 million middle-income people by the year 2020, would the scenario presented Best Buy in 2006 not be applicable anymore? That is, the culture shock in 2006 was that the Chinese would not pay for Best Buy’s overly expensive products unless they are a brand like Apple. Would newly rich Chinese customer engage in this purchasing behavior by 2020?