An individual decides to invest in one of two projects, A and B, which both require the same initial outlay of $10000. Project A yields $11500 in three years' time whereas Project B yields, $12 100 in four years' time. Calculate the internal rate of return for each project. What advice can you give if the prevailing market rate of interest is 4.8%?

An individual decides to invest in one of two projects, A and B, which both require the same initial outlay of $10000. Project A yields $11500 in three years' time whereas Project B yields, $12 100 in four years' time. Calculate the internal rate of return for each project. What advice can you give if the prevailing market rate of interest is 4.8%?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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