Janine will earn $100,000 in income this year, and next year. She has an opportunity to...
Janine will earn $100,000 in income this year, and next year. She has an opportunity to invest in some land for $70,000, and is certain the land will be worth $75,000 next year. She could also invest in the stock market and generate a return of 10%.
Which investment opportunity is better? How much money will she have to consume in Year 2?
Homework Answers
Ans Return on Option 2 i.e Investment in stocks give higher returns.
Return in Option 1 i.e Investment in Land = Closing Price - Opening Price
= 75000 - 70000
= 5000
Return in Option 2 i.e Investment in Stock = Investment * Return %
= 70000 * 10%
= 7000
Return on Option 2 i.e Investment in stocks give higher returns.
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