You have been offered a very long-term investment opportunity to increase your money one hundredfold. You...

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You have been offered a very long-term investment opportunity to increase your money one hundredfold. You can invest $1,700 t

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Answer 1

Answer #1

Calculating IRR,

170,000 = 1,700(1 + r)⁴⁰

r = 12.20%

IRR = 12.20%

As Cost of Capital(25%) is greater than IRR(12.20%) investment should not be made.

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Answer 2

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