You have invested in a business that proudly reports that it is profitable. Your investment of $4600

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You have invested in a business that proudly reports that it is profitable. Your investment of $4600 has produced a profit of $302. The managers think that if you leave your $4600 invested with them, they should be able to generate $302 per year in profits for you in perpetuity. Evaluating other investment opportunities, you note that other long-term investments of similar risk offer an expected return of 7.5%. Should you remain invested in this firm?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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