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A company faces a choice. It has a total working capital of 1,000,000. The planning horizon is ten years. One option, there is a ten
A company faces a choice. It has a total working capital of 1,000,000. The planning horizon is ten years. One option, there is a ten year certificate of deposit which pays 12% per year. It must be left in for the entire time. There is a second bank account which pays 6% per year and can added to at any time (withdrawal at any time also). Machine A will cost 500,000, it will generate 200,000 per year in revenue and no salvage value at 10 years. Machine B will cost 600,000 will generate revenue of 150,000 and have a salvage value of 200,000 at year ten. Analyze this system using portfolio technique. in detail
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