Question
Sort the investment opportunities described in Table 2 from highest to lowest return, and plot a line on the graph you drew in part (3)
Sort the investment opportunities described in Table 2 from highest to lowest return, and plot a line on the graph you drew in part (3) above showing how much money is required to fund the investments, starting with the highest return and going to the lowest. In other words, this line will plot the relationship between the IRR on the firm\'s investments and the total financing required to undertake those investments.
TABLE 2
Investment Opportunities | ||
Investment Opportunity | Internal rate Of return (IRR) | Initial investment |
A | 21% | $400,000 |
B | 19 | 200,000 |
C | 24 | 700,000 |
D | 27 | 500,000 |
E | 18 | 300,000 |
F | 22 | 600,000 |
G | 17 | 500,000 |
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