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2. You want to invest in a small business, and are offered a choice of two investment schemes. In Scheme 1 you pay 200 now
2. You want to invest in a small business, and are offered a choice of two investment schemes. In Scheme 1 you pay 200 now and 200 in a year's time, and in return you will receive a single payment of 450 in two years' time. The rate of return of Scheme 1 is 8.11%. In Scheme 2 you pay 400 in a year's time, and in return you will receive a single payment of 450 in two years' time. Which one of the following statements is true? A. The rate of return of Scheme 2 is 8.11%. B. The rate of return of Scheme 2 is less than 8.11%. C. We cannot calculate the rate of return of Scheme 2 from this information. D. The rate of return of Scheme 2 is greater than 8.11%. E. The rate of return will depend on the discount rate. F. The rate of return will depend on the interest rate
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