the 2002 Aerotron Radio Inc. has $250,000 available and following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of 5 years and have its initial investment returned. In addition, each year Aerotron will receive the annual return shown below. MARR is 12%. Investment 1 2 3 4 5 Initial Investment $75,000 $65,000 $50,000 $80,000 $100,000 Annual Return $10,800 $12,000 $7,500 $13,750 $15,750 For the original problem: a. Which investments should Aerotron select for the optimum portfolio? b. What is the present worth for the optimum investment portfolio? c. What is the IRR for the optimum investment portfolio?
the 2002 Aerotron Radio Inc. has $250,000 available and following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of 5 years and have its initial investment returned. In addition, each year Aerotron will receive the annual return shown below. MARR is 12%. Investment 1 2 3 4 5 Initial Investment $75,000 $65,000 $50,000 $80,000 $100,000 Annual Return $10,800 $12,000 $7,500 $13,750 $15,750 For the original problem: a. Which investments should Aerotron select for the optimum portfolio? b. What is the present worth for the optimum investment portfolio? c. What is the IRR for the optimum investment portfolio?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![nas proposed the
12.02-PR002 Aerotron Radio Inc. has $250,000 available and its engineering
following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of
5 years and have its initial investment returned. In addition, each year Aerotron will receive the
annual return shown below. MARR is 12%.
Initial Investment
$75,000
$65,000
$50,000
$80,000
$100,000
Investment
1
2
3
4
5
Annual Return
$10,800
$12,000
$7,500
$13,750
$15,750
For the original problem:
a. Which investments should Aerotron select for the optimum portfolio?
b. What is the present worth for the optimum investment portfolio?
c. What is the IRR for the optimum investment portfolio?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7e87b695-12fc-4dc8-83cc-95726292be00%2F0612ba6f-880f-4799-8ed6-2cc838b45994%2Fq7h6y9w_processed.jpeg&w=3840&q=75)
Transcribed Image Text:nas proposed the
12.02-PR002 Aerotron Radio Inc. has $250,000 available and its engineering
following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of
5 years and have its initial investment returned. In addition, each year Aerotron will receive the
annual return shown below. MARR is 12%.
Initial Investment
$75,000
$65,000
$50,000
$80,000
$100,000
Investment
1
2
3
4
5
Annual Return
$10,800
$12,000
$7,500
$13,750
$15,750
For the original problem:
a. Which investments should Aerotron select for the optimum portfolio?
b. What is the present worth for the optimum investment portfolio?
c. What is the IRR for the optimum investment portfolio?
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