As the finance manager of your company, you need to decide where to invest. A project

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As the finance manager of your company, you need to decide where to invest.

• A project that pays ₹100,000 one year later; the cost of the project is ₹90,000.

• Alternatively, you can invest in a bank that pays 10 per cent interest.

a. Would you invest in the project or with the bank?

b. What happens if the bank increases its interest rate to 12 per cent?

c. What is the bank interest rate at which you would be indifferent between the two rates?

d. What other aspect will you take into account in determining which of the two options to invest in?

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Corporate Finance Theory And Practice In Emerging Economies

ISBN: 9781108486965

1st Edition

Authors: Sunil Mahajan

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Question Posted: Feb 24, 2024 03:01 AM

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As the finance manager of your company, you need to decide where to invest. A project

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Investment Decision Making Project vs Bank a Invest in the project or the bank To answer this question we need to compare the potential returns of bot...View the full answer

Corporate Finance Theory And Practice In Emerging Economies

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