Bob Davies must decide whether to invest $100,000 in his own business or in another local business. Both investment projects have an expected life of five years. The cash flow of each is as follows: 11eb7369_6a86_a048_9c10_2b6a75000853_SM2911_00 Suppose the risk of the projects is the same and is accounted for by a risk premium of 6 percent per year. Would either investment make sense? Which would be better?

Managerial Economics 2nd Edition by William Boyes

النسخة 2الرقم المعياري الدولي: 978-0618988624

Managerial Economics 2nd Edition by William Boyes

النسخة 2الرقم المعياري الدولي: 978-0618988624

تمرين 13

Bob Davies must decide whether to invest $100,000 in his own business or in another local business. Both investment projects have an expected life of five years. The cash flow of each is as follows:

Suppose the risk of the projects is the same and is accounted for by a risk premium of 6 percent per year. Would either investment make sense? Which would be better?

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Cost of capital:
Opportunity cost for m...