#11

You are considering a safe investment opportunity that requires a $960 imvestment today, and will pay $510 two years from now and another $780 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 yoar for any horizon, can you make the decision by simply comparing this EAR with the IRR of the investment? Explain. a. What is the IRR of this investment? The IRR of this imvestment is \%. (Round to two decimal places.) 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 decisian by simply compaing this EAR with the IRR of the investrwant? Explain. (Select the best choice below.) A. No, this is live comparing the IRRs of two projects. B. No, because the timing of the cash flows are different. C. Yes, because the EAR is the same at all horizons, so the two "projects" have the same riskiness, scale and timing. D. Yes, you can ahasys compare iRRs of riskless projects, and an imvestment in the bank is riskless