Question
You have been given an investment budget of $24 million. You must choose from among the following three independent projects: Project Year 0 Year 1
You have been given an investment budget of $24 million. You must choose from among the following three independent projects:
| Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| A | -$12 | $10 | $10 | $14 |
|
|
| B | -$12 | $8 | $8 | $8 | $8 | $2 |
| C | -$12 | $6 | $6 | $6 | $6 | $6 |
(All dollar amounts are in millions.)
The appropriate hurdle rate for all three projects is 12% per year. Given your investment budget of $24 million, which projects will you undertake, if any?
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Essential Personal Finance A Practical Guide For Students
Authors: Lien Luu, Jonquil Lowe, Jason Butler, Tony Byrne
1st Edition
