P4.18 Elliott Dumack must earn a minimum rate of return of 11% to be adequately compen- sated
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P4.18 Elliott Dumack must earn a minimum rate of return of 11% to be adequately compen- sated for the risk of the following investment. Initial Investment $14,000 End of Year Income 1 $6,000 23 2 3,000 5,000 4 5 2,000 1,000
a. Use present-value techniques to estimate the yield on this investment.
b. On the basis of your finding in part
a, should Elliott make the proposed investment? Explain.
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Related Book For 
Fundamentals Of Investing
ISBN: 9780136117049
11th Edition
Authors: Lawrence J. Gitman, Michael D. Joehnk, Scott B. Smart, Scott J. Smart
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