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
Investment projects fall within two types. What are they?
Expert Solution
Step 1
An investment project is a series of cash inflows and outpourings, normally beginning with a money outflow (the underlying speculation cost) trailed with money inflows as well as money outpourings in later (years) time.
Step 2
The investment projects are classified into two categories based on the cash flows nature as follows:
- Conventional cash flow projects: These are the projects in which the cash flow sign will vary only one time. That initial cash outflow and further cash inflows in the coming periods or vice versa.
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