Question you are considering a safe investment opportunity, Ask an Expert

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Question: You are considering a safe investment opportunity that requires a $1,140 investment? today, and will pay $770 two years from now and another $840 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 pays an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR with the IRR of the investment? Explain.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92798814

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