Consider the following cash flows on two mutually exclusive projects with similar risk for the Bahamas...
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Consider the following cash flows on two mutually exclusive projects with similar risk for the Bahamas Recreation Corporation (BRC). BRC require an annual return of 15 percent. Whic project should you choose? Why? New Submarine Year Ride 0 1 2 IRR Deepwater Fishing -2,00,000 50,000 2,50,000 25% -4,00,000 2,90,000 2,50,000 23% (b) You are keen to obtain a helicopter pilot's licence. A club offers you lessons over two years, with a choice between the following payment terms: you can either pay the full fees (Rs100, 000) immediately with a 5% discount; or you can make two equal annual payments, the first one due immediately. At what interest rate would these two options work out at the same cost? Consider the following cash flows on two mutually exclusive projects with similar risk for the Bahamas Recreation Corporation (BRC). BRC require an annual return of 15 percent. Whic project should you choose? Why? New Submarine Year Ride 0 1 2 IRR Deepwater Fishing -2,00,000 50,000 2,50,000 25% -4,00,000 2,90,000 2,50,000 23% (b) You are keen to obtain a helicopter pilot's licence. A club offers you lessons over two years, with a choice between the following payment terms: you can either pay the full fees (Rs100, 000) immediately with a 5% discount; or you can make two equal annual payments, the first one due immediately. At what interest rate would these two options work out at the same cost?
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Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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