Two investments have the following pattern of expected returns: Investment A Year 1 Year 2 Year 3 Year 4 Year 4 (Sale) BTCF $6,300 $11,300 $13,300 $16,300 $133,000 Investment B Year 1 Year 2 Year 3 Year 4 BTCF $3,300 $5,300 $2,300 Year 4 $6,300 (Sale) $193,000 Investment A requires an outlay of $123,000 and Investment B requires an outlay of $133,000. Required: a. What is the BTIRR on each investment? b. If the BTIRR were partitioned based on BTCFO and BTCFS what proportions of the BTIRR would be represented by each? c. Which investment would be preferable? Complete this question by entering your answers in the tabs below. Required Required Required A B C What is the BTIRR on each investment? (Round your answers to 2 decimal places.) Investment Investment A B BTIRR % % < Required A Required B >
Two investments have the following pattern of expected returns: Investment A Year 1 Year 2 Year 3 Year 4 Year 4 (Sale) BTCF $6,300 $11,300 $13,300 $16,300 $133,000 Investment B Year 1 Year 2 Year 3 Year 4 BTCF $3,300 $5,300 $2,300 Year 4 $6,300 (Sale) $193,000 Investment A requires an outlay of $123,000 and Investment B requires an outlay of $133,000. Required: a. What is the BTIRR on each investment? b. If the BTIRR were partitioned based on BTCFO and BTCFS what proportions of the BTIRR would be represented by each? c. Which investment would be preferable? Complete this question by entering your answers in the tabs below. Required Required Required A B C What is the BTIRR on each investment? (Round your answers to 2 decimal places.) Investment Investment A B BTIRR % % < Required A Required B >
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
Related questions
Question
Nikulbhai
Transcribed Image Text:Two investments have the following pattern of expected returns:
Investment A
Year 1 Year 2
Year 3 Year 4
Year 4
(Sale)
BTCF $6,300 $11,300 $13,300 $16,300 $133,000
Investment B
Year 1 Year 2 Year 3 Year 4
BTCF $3,300
$5,300
$2,300
Year 4
$6,300
(Sale)
$193,000
Investment A requires an outlay of $123,000 and Investment B requires an outlay of $133,000.
Required:
a. What is the BTIRR on each investment?
b. If the BTIRR were partitioned based on BTCFO and BTCFS what proportions of the BTIRR would be represented by
each?
c. Which investment would be preferable?
Complete this question by entering your answers in the tabs below.
Required Required Required
A
B
C
What is the BTIRR on each investment? (Round your answers to 2 decimal places.)
Investment Investment
A
B
BTIRR
%
%
< Required A
Required B >
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