Project A, currently requires an investment of IDR 250 billion, and will generate revenue of IDR 275 billion next year. Meanwhile, to build project B, a fund of IDR 2.5 trillion is needed, with a potential revenue of IDR 2.7 trillion in the following year. Using the concepts of internal rate of return and net present value, which project should be built? Explain your reasons. (assuming the prevailing interest rate is 6 percent).
Project A, currently requires an investment of IDR 250 billion, and will generate revenue of IDR 275 billion next year. Meanwhile, to build project B, a fund of IDR 2.5 trillion is needed, with a potential revenue of IDR 2.7 trillion in the following year. Using the concepts of internal rate of return and net present value, which project should be built? Explain your reasons. (assuming the prevailing interest rate is 6 percent).
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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Project A, currently requires an investment of IDR 250 billion, and will generate revenue of IDR 275 billion next year. Meanwhile, to build project B, a fund of IDR 2.5 trillion is needed, with a potential revenue of IDR 2.7 trillion in the following year. Using the concepts of
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