Question
Midwest Bank offers a return of 5% compounded annually for each and every year. The rival BFB offers a return of 3% for the first
Midwest Bank offers a return of 5% compounded annually for each and every year. The rival BFB offers a return of 3% for the first year and 7% in the second and subsequent years (both compounded annually). Which bank would you choose to invest in if you decided to invest a principal for
(a) 2 years;
(b) 3 years?
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Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
