Alternative Initial Investment Annual Return Salvage Value M $8,000 $3,200 $1,000 $15,000 $4,750 $1,750 $10,000 $3,070 $1,100 P $20,000 $5,950 $2,000 Q $19,000 $5,150 $2,100 R $12,000 $4,250 $1,200
Alternative Initial Investment Annual Return Salvage Value M $8,000 $3,200 $1,000 $15,000 $4,750 $1,750 $10,000 $3,070 $1,100 P $20,000 $5,950 $2,000 Q $19,000 $5,150 $2,100 R $12,000 $4,250 $1,200
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Consider the 6 divisible investment alternatives shown below. The planning horizon is 8 years. The MARR is 15%. $60,000 is available for investment. Solve, a. What proportion of each investment is to be included in the optimum investment portfolio? b. Solve part a when full or partial investment cannot be made in more than 3 of the investments. c. Solve part a when investments P and R are mutually exclusive.
Transcribed Image Text:Alternative Initial Investment Annual Return Salvage Value
M
$8,000
$3,200
$1,000
$15,000
$4,750
$1,750
$10,000
$3,070
$1,100
P
$20,000
$5,950
$2,000
Q
$19,000
$5,150
$2,100
R
$12,000
$4,250
$1,200
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