Your company is considering investing in three projects with projected Operating Income and Investment streams as...

 

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Your company is considering investing in three projects with projected Operating Income and Investment streams as shown in the following table. Rank the three projects by ROI, IRR, DROI, and AOEROR assuming your investment opportunity rate is 20% and using mid-period discounting. For calculating AOEROR use a common terminal point for all projects at the end of year 10. a. If your company only has $6 million to invest in one of these projects (and plenty of small projects that will return 20% on average) which project do you recommend? b. If your company finds some more money and now has $11 million to invest (and plenty of small projects that will return 20% on average) which project(s) do you recommend? Your company is considering investing in three projects with projected Operating Income and Investment streams as shown in the following table. Rank the three projects by ROI, IRR, DROI, and AOEROR assuming your investment opportunity rate is 20% and using mid-period discounting. For calculating AOEROR use a common terminal point for all projects at the end of year 10. a. If your company only has $6 million to invest in one of these projects (and plenty of small projects that will return 20% on average) which project do you recommend? b. If your company finds some more money and now has $11 million to invest (and plenty of small projects that will return 20% on average) which project(s) do you recommend?

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a If your company only has 6 million to invest in one of these projects and plenty of small projects ... View the full answer