You are thinking about investing $5,022 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,615 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 10% for the year. What should you do?

You are thinking about investing $5,022 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,615 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 10% for the year. What should you do?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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