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Two investments have the following pattern of expected returns: Investment A BTCF Year 1 $6,000 Year 2 $11,000 Year 3 $13,000 Year 4 $16,000
Two investments have the following pattern of expected returns: Investment A BTCF Year 1 $6,000 Year 2 $11,000 Year 3 $13,000 Year 4 $16,000 Year 4 (Sale) $130,000 Investment B Year 4 BTCF Year 1 $3,000 Year 2 $5,000 Year 3 $2,000 Year 4 $6,000 (Sale) $190,000 Investment A requires an outlay of $120,000 and Investment B requires an outlay of $130,000. Required: a. What is the BTIRR on each investment? b. If the BTIRR were partitioned based on BTCF, and BTCFS' what proportions of the BTIRR would be represented by each? c. Which investment would be preferable? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the BTIRR on each investment? (Round your answers to 2 decimal places.) BTIRR Investment A % Investment B %
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