You are considering a safe investment opportunity that requires a $780 investment today, and will pay $570
Question:
You are considering a safe investment opportunity that requires a $780 investment today, and will pay $570 two years from now and another $580 five years from now.
a. What is the IRR of this investment?
b. If you are choosing between this investment and putting your money in a safe bank account that pays an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR with the IRR of the investment? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a To calculate the Internal Rate of Return IRR for this investment opportunity we can use the formul...View the full answer
Answered By
PU Student
cost accounting
financial accounting
auditing
internal control
business analyst
tax
i have 3 years experience in field of management & auditing in different multinational firms. i also have 16 months experience as an accountant in different international firms. secondary school certification.
higher secondary school certification.
bachelors in mathematics.
cost & management accountant
4+ Reviews
10+ Question Solved
Related Book For 
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
Question Posted:
