Industrial Zone Group, which operates in the building industry in South Caucasus, is considering making investments in
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Question:
Industrial Zone Group, which operates in the building industry in South Caucasus, is considering making investments in regional projects. The CEO of the group was offered two projects regarding financing.
- Project 1 requires an initial investment of $100,000 and will last 8 years; it will generate $20,000 per year.
- Project 2 requires an initial investment of $150,000; this project will last 10 years and will generate $28,000 per year.
- Which project should be taken? Why? The required rate of return is 12 percent.
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