Question
You are considering a safe investment opportunity that requires a $820 investment today, and will pay $810 two years from now and another $770 five
You are considering a safe investment opportunity that requires a $820 investment today, and will pay $810 two years from now and another $770 five years from now.
a. What is the IRR of this investment?
b. If you are choosing between this investment and putting your money in a safe bank account that pays an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR with the IRR of the investment? Explain
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Emerging Markets And The Global Economy A Handbook
Authors: Mohammed El Hedi Arouri, Sabri Boubaker, Duc Khuong Nguyen
1st Edition
0124115497, 978-0124115491
