Question
Turi is evaluating 2 investment options both giving +NPV; either project 1 (P1) or project (2). Both projects require the same amount of initial investment
Turi is evaluating 2 investment options both giving +NPV; either project 1 (P1) or project (2). Both projects require the same amount of initial investment and expect to receive the following annual cash flows. Turi expects 8% return from each investment. Which project Turi should choose and why?
Year Cash Flow (P1) Cash Flow (P2)
1 $5,000 $4,000
2 5,000 6,000
3 5,000 5,000
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
