John wants to invest $1 000 000. He has two options. The first option is to buy government bonds that earn 4% annually. The second option is to buy an apartment building that brings him $100 000 per year in revenues. Compare the two options in terms of their internal rates of return. (Your answer in the answer box should be ith Colouleti
John wants to invest $1 000 000. He has two options. The first option is to buy government bonds that earn 4% annually. The second option is to buy an apartment building that brings him $100 000 per year in revenues. Compare the two options in terms of their internal rates of return. (Your answer in the answer box should be ith Colouleti
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:John wants to invest $1 000 000. He has two options.
The first option is to buy government bonds that earn
4% annually. The second option is to buy an apartment
building that brings him $100 000 per year in revenues.
Compare the two options in terms of their internal rates
of return. (Your answer in the answer box should be
either 1 or 2). Calculations should be provided.
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