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Assume a two period perfect certainty world. A firm has the following independent investment opportunities: Project Period 1 Outlay Period 2 Return 100,000 120,000 B
Assume a two period perfect certainty world. A firm has the following independent investment opportunities: Project Period 1 Outlay Period 2 Return 100,000 120,000 B 150,000 162,000 C 200,000 226,000 D 300,000 333,000 The firm has an initial endowment of $500,000 and the market rate of return is 10.00%. If the firm's management decides to invest in only two projects, which projects should they choose? a. A and C b. A and D O c. B and D d. C and D e. None of the above
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