Required: a. Based on cash flows given, with no other analysis, which investments would be a good investment? Which would be a bad investment? b. Based on cash flows given, and no other analysis, rank the investments based on preference/ desirability. Rank 1st, 2nd, 3rd, 4th. If ties, please explain why! c. If you analyzed the cash flows, what would you do? Briefly exp
Required: a. Based on cash flows given, with no other analysis, which investments would be a good investment? Which would be a bad investment? b. Based on cash flows given, and no other analysis, rank the investments based on preference/ desirability. Rank 1st, 2nd, 3rd, 4th. If ties, please explain why! c. If you analyzed the cash flows, what would you do? Briefly exp
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...
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Question
You have the ability to invest $100,000 and have a choice between the following investments that return $150,000 over the next 5 years:
Year | A | B | C | D |
1 | $10,000 | $30,000 | $50,000 | |
2 | $20,000 | $30,000 | $40,000 | |
3 | $30,000 | $30,000 | $30,000 | |
4 | $40,000 | $30,000 | $20,000 | |
5 | $50,000 | $30,000 | $10,000 | $150,000 |
Required:
a. Based on
b. Based on cash flows given, and no other analysis, rank the investments based on preference/ desirability. Rank 1st, 2nd, 3rd, 4th. If ties, please explain why!
c. If you analyzed the cash flows, what would you do? Briefly explain
NOTE: Each of the above requires a short narrative answer.
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