Question
Mr. Oriento of Zed Ltd. Has to make a choice between two mutually exclusive investments: Cash flows (Shs. 000) T 0 T 1 T 2
- Mr. Oriento of Zed Ltd. Has to make a choice between two mutually exclusive investments:
| Cash flows (Shs. 000) | ||||
|
| T0 | T1 | T2 | IRR |
| Alpha | -400 | 250 | 300 | 23 |
| Omega | 200 | 140 | 179 | 36 |
The opportunity cost of capital is 9% per annum. Mr. Oriento wants to invest in Omega which has the higher IRR.
Do you agree with Mr. Orientos choice? Show appropriate computations. (5 marks
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Distressed Debt Analysis Strategies For Speculative Investors
Authors: Stephen Moyer
1st Edition
1932159185, 978-1932159189
