Question
Consider the following investment/dividend opportunities facing a company in 3 periods. Project Investment (now) Dividend Yr 1 Dividend Yr 2 A 450 40 500 B
Consider the following investment/dividend opportunities facing a company in 3 periods.
| Project | Investment (now) | Dividend Yr 1 | Dividend Yr 2 |
| A | 450 | 40 | 500 |
| B | 700 | 0 | 820 |
Then which project would be preferred according to Internal Rate of Return?
[Hint: Try evaluating at 9% RoR]
A.
B.
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Financial Markets And Institutions An Introduction To Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
3rd Edition
0073250937, 9780073250939
