Which of the following investment options has the lowest IRR? (Hint: calculation is not necessary to answer this question) Cash Flow Investment Investment Investment Investment Cost of Capital 1 2 3 4 5% (30,000) Year Description Year 0 (today) Buy Stock Year 1 Dividends Year 2 Dividends Dividends Dividends Sell Stock Year 3 Year 4 Year 5 Multiple Choice Investment 31 Investment 1 Investment 4 Investment 2 (30,000) (30,000) 6,000 30,000 2,000 2,000 32,000 (30,000) 2,000 2,000 32,000 2,000 2,000 32,000
Which of the following investment options has the lowest IRR? (Hint: calculation is not necessary to answer this question) Cash Flow Investment Investment Investment Investment Cost of Capital 1 2 3 4 5% (30,000) Year Description Year 0 (today) Buy Stock Year 1 Dividends Year 2 Dividends Dividends Dividends Sell Stock Year 3 Year 4 Year 5 Multiple Choice Investment 31 Investment 1 Investment 4 Investment 2 (30,000) (30,000) 6,000 30,000 2,000 2,000 32,000 (30,000) 2,000 2,000 32,000 2,000 2,000 32,000
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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Transcribed Image Text:Which of the following investment options has the lowest IRR? (Hint: calculation is not necessary to answer this question)
Cash Flow Investment Investment Investment Investment Cost of Capital
1
2
3
4
5%
(30,000)
Year
Description
Year 0 (today) Buy Stock
Year 1
Year 2
Year 3
Year 4
Year 5
Dividends
Dividends
Dividends
Dividends
Sell Stock
Multiple Choice
Investment 3
Investment 1
Investment 4
Investment 2
(30,000) (30,000)
6,000
30,000
2,000
2,000
32,000
(30,000)
2,000
2,000
32,000
2,000
2,000
32,000
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