An individual decides to invest in one of two projects, A and B, which both require the same initial outlay of $10000. Project A yields $11500 in three years' time whereas Project B yields, $12 100 in four years' time. Calculate the internal rate of return for each project. What advice can you give if the prevailing market rate of interest is 4.8%?

An individual decides to invest in one of two projects, A and B, which both require the same initial outlay of $10000. Project A yields $11500 in three years' time whereas Project B yields, $12 100 in four years' time. Calculate the internal rate of return for each project. What advice can you give if the prevailing market rate of interest is 4.8%?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 22P

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