Jamal, who is adventurous, decides to take a year-long road trip from Bangladesh to South Africa via Egypt. He buys a used car for Tk.500,000. At the end of the trip he sells the car for (the equivalent of) Tk.250,000. Furthermore, the benefit he derived from the car could be measured as Tk.300,000. (a) Calculate the internal rate of return. (b) Instead of going on the road trip, Jamal could have put his money
Jamal, who is adventurous, decides to take a year-long road trip from Bangladesh to South Africa via Egypt. He buys a used car for Tk.500,000. At the end of the trip he sells the car for (the equivalent of) Tk.250,000. Furthermore, the benefit he derived from the car could be measured as Tk.300,000. (a) Calculate the internal rate of return. (b) Instead of going on the road trip, Jamal could have put his money
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Jamal, who is adventurous, decides to take a year-long road trip from Bangladesh to South Africa via Egypt. He buys a used car for Tk.500,000. At the end of the trip he sells the car for (the equivalent of) Tk.250,000. Furthermore, the benefit he derived from the car could be measured as Tk.300,000.
(a) Calculate the
(b) Instead of going on the road trip, Jamal could have put his money in a bank account paying 12% per annum. In this case, was going on the road trip a wise monetary decision?
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