Question
Suppose that are considering where to invest your money. You have narrowed down your choice to two distinct assets. Asset-A is high-risk savings account that
Suppose that are considering where to invest your money. You have narrowed down your choice to two distinct assets. Asset-A is high-risk savings account that offers you an interest return of 40% per year on any funds deposited. Asset-B is an apartment complex that is for sale at $69,758 but that is expected to generate $23,000 per year for the next for years at the end of each year in revenue. At the end of 5 years, you expect to sell the property for $165,000. However, each year you hold the property you have to pay property taxes in the amount of $2500 which are due at the end of each year, starting with the end of year 1 and including the end of year 5. An analyst has told you that both accounts are equally risky. Holding all else constant, which asset will generate the highest internal rate of return.
Group of answer choices
Asset-A
Asset-B
Not enough information to tell
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