Question
RKK has an IRR of 25% over a 1-year project. As an investor with a 2-year investment horizon, you called a partner at RKK who
RKK has an IRR of 25% over a 1-year project. As an investor with a 2-year investment horizon, you called a partner at RKK who agreed to re-invest the earnings at time 1 into a new project and pay everything out the profit and initial investment to you at time 2 What must the return for that project be from 1 to 2 such that the IRR of the two year project is still 25%?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
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