# Question: Sara Holliday must earn a return of 10 on an

Sara Holliday must earn a return of 10% on an investment that requires an initial outlay of $2,500 and promises to return $6,000 in 8 years.

a. Use present value techniques to estimate the yield on this investment.

b. On the basis of your finding in part a, should Sara make the proposed investment? Explain.

a. Use present value techniques to estimate the yield on this investment.

b. On the basis of your finding in part a, should Sara make the proposed investment? Explain.

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