Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are considering a safe investment opportunity that requires a $1,410 investment today, and will p
$780 two years from now and another $830 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 pa
an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR wit
the IRR of the investment? Explain.
a. What is the IRR of this investment?
The IRR of this investment is %. (Round to two decimal places.)
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Transcribed Image Text:You are considering a safe investment opportunity that requires a $1,410 investment today, and will p $780 two years from now and another $830 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 pa an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR wit the IRR of the investment? Explain. a. What is the IRR of this investment? The IRR of this investment is %. (Round to two decimal places.)
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