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Two investments have the following pattern of expected returns: Investment A Year 1 $5,000 Year 2 $10,000 Year 3 $12,000 Year 4 $15,000 Year 4
Two investments have the following pattern of expected returns: Investment A Year 1 $5,000 Year 2 $10,000 Year 3 $12,000 Year 4 $15,000 Year 4 (Sale) $120,000 BTCF Investment B Year 1 $2,000 Year 2 $4,000 Year 3 $1,000 Year 4 $5,000 Year 4 (Sale) $180,000 BTCF Investment A requires an outlay of $110,000 and Investment B requires an outlay of $120,000. 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
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