Q3. Suppose you have 5 investments lasts for exactly 10 years and the investors can choose only one investment option. Which ones should be chosen? Explain your answer? Note: The decision is made based on 20% MARR Investment Opportunity 1 2 3 4 5 Initial investment 25,000 15,000 70,000 50,000 40,000 Annual Return 5,000 3,750 14,250 11,250 9,250 Salvage Return 25,000 15,000 70,000 50,000 40,000 Inter Rate of Return

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Q3. Suppose you have 5 investments lasts for exactly 10 years and the investors can
choose only one investment option.
Which ones should be chosen? Explain your answer?
Note: The decision is made based on 20% MARR
Investment Opportunity
1
3
4
5
Initial investment
25,000
15,000
70,000
50,000 40,000
Annual Return
5,000
3,750
14,250
11,250
9,250
Salvage Return
25,000
15,000
70,000
50,000 40,000
Inter Rate of Return
Transcribed Image Text:Q3. Suppose you have 5 investments lasts for exactly 10 years and the investors can choose only one investment option. Which ones should be chosen? Explain your answer? Note: The decision is made based on 20% MARR Investment Opportunity 1 3 4 5 Initial investment 25,000 15,000 70,000 50,000 40,000 Annual Return 5,000 3,750 14,250 11,250 9,250 Salvage Return 25,000 15,000 70,000 50,000 40,000 Inter Rate of Return
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