Two investments have the following pattern of expected returns: BTCF Year 1 $6,400 Year 1 BTCF $3,400 Year 2 $11,400 Year 2 $5,400 Investment A Year 3 $13,400 Investment B Year 3 $2,400 Year 4 $16,400 Year 4 $6,400 Year 4 (Sale) $134,000 Year 4 (Sale) $194,000 Investment A requires an outlay of $124,000 and Investment B requires an outlay of $134,000.
Two investments have the following pattern of expected returns: BTCF Year 1 $6,400 Year 1 BTCF $3,400 Year 2 $11,400 Year 2 $5,400 Investment A Year 3 $13,400 Investment B Year 3 $2,400 Year 4 $16,400 Year 4 $6,400 Year 4 (Sale) $134,000 Year 4 (Sale) $194,000 Investment A requires an outlay of $124,000 and Investment B requires an outlay of $134,000.
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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b. If the BTIRR were partitioned based on BTCFo and BTCFs' what proportions of the BTIRR would be represented by each?
Transcribed Image Text:Two investments have the following pattern of expected returns:
BTCF
Year 1
$6,400
Year 1
BTCF $3,400
Year 2
$11,400
Year 2
$5,400
Investment A
Year 3
$13,400
Investment B
Year 3
$2,400
Year 4
$16,400
Year 4
$6,400
Year 4
(Sale)
$134,000
Year 4
(Sale)
$194,000
Investment A requires an outlay of $124,000 and Investment B requires an outlay of $134,000.
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