You have 5000 to invest and you want to recover your money within 4 years. Your...
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You have 5000 to invest and you want to recover your money within 4 years. Your cost of capital is 12%. You have following investment opportunties that have same risk. Which one you will choose and why? Give your reasoning for each opportunity that you eliminate. A C -4320 -500 1000 2500 0 Year O 1 Year 1 2 Year 2 3 Year 3 4 Year 4 5 Year 5 6 Year 6 7 Year 7 NPV IRR PP r - B 5.500,0 1.000,0 2.000 1.500,0 3.000 2.000,0 4.500 2.500,0 2.000 4.500 500 3.000,0 3.000 3.500,0 5.000 4.000,0 12% 12% 3000 2400 1400 500 12% D -4560 -1000 500 1200 3000 3000 4500 5600 12% E -4000 500 1200 1400 1600 2000 1300 300 12% You have 5000 to invest and you want to recover your money within 4 years. Your cost of capital is 12%. You have following investment opportunties that have same risk. Which one you will choose and why? Give your reasoning for each opportunity that you eliminate. A C -4320 -500 1000 2500 0 Year O 1 Year 1 2 Year 2 3 Year 3 4 Year 4 5 Year 5 6 Year 6 7 Year 7 NPV IRR PP r - B 5.500,0 1.000,0 2.000 1.500,0 3.000 2.000,0 4.500 2.500,0 2.000 4.500 500 3.000,0 3.000 3.500,0 5.000 4.000,0 12% 12% 3000 2400 1400 500 12% D -4560 -1000 500 1200 3000 3000 4500 5600 12% E -4000 500 1200 1400 1600 2000 1300 300 12%
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Solution I have analyzed the given investment opportunities and my recommendation is to choose inves... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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