Question
An investor is trying to decide whether should would invest the Rs. 300,000 she received from the sale of her vanity in a blue whale
An investor is trying to decide whether should would invest the Rs. 300,000 she received from the sale of her vanity in a blue whale venture or in a small fast food restaurant. If she invests in the blue whale venture she will receive Rs. 35,000 each quarter (starting three months from now). She expects to sell her share in the blue whale venture for Rs. 400,000 six years from now. If she invests in the fast food restaurant, she will have to put up another Rs. 100,000 one year from now. However starting 2 years from now, her profit will be Rs. 90,000 per year (paid in 4 equal parts every quarter) for 5 years, after which she will receive Rs. 350,000 from the sale of the business. Suppose investor can borrow/deposit any amount for interest of 12% compounded monthly. Which investment should she choose?
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