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USE THESE FACTS TO ANSWER THE NEXT TWO QUESTIONS I am considering two investment choices and I must pick one of them OR Neither of
USE THESE FACTS TO ANSWER THE NEXT TWO QUESTIONS I am considering two investment choices and I must pick one of them OR Neither of them. I cannot pick both. The first opportunity requires an investment of 100 dollars today and will return 10 dollars per year forever. The other opportunity requires 200 dollars of investment today and will return 20 dollars per year forever. What should I do if my cost of capital is 10% Reject both projects because either one will create any value Accept the project costing 100 dollars Accept the project costing 200 dollars Accept both projects as they both will create value Question 4 5 pts Use the same facts as in the previous question: I am considering two investment choices and I must pick one of them OR Neither of them. I cannot pick both. The first opportunity requires an investment 100 dollars today and will return 10 dollars per year forever. The other opportunity requires 200 dollars of investment today and will return 20 dollars per year forever. What should I do if my cost of capital is 7% Accept the project costing 100 dollars Accept the project costing 200 dollars Reject both projects Accept both projects
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