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
Related questions
Question
Transcribed Image Text:An investor wants to invest his
money (100 million) U. He has two choices: -
Deposit the money in a bank with interest rate
15%, for 10
1-
years.
Using the money to buy a factory of producing a
building
material with a producing cost (1000) U. The factory
produce (50000) unit for
10 years (the factory life is 10 years and there is no
selling price for it
after this period). The factory will satisfy (500000) U as
profits.
2-
Based on calculations, which one
of the two choices is better?
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