You are deciding between two mutually exclusive investment opportunities. both require the same initial investment of $ 10.1 million. investment a will generate $ 1.97 million per year (starting at the end of the first year) in perpetuity. investment b will generate $ 1.58 million at the end of the first year, and its revenues will grow at 2.9 % per year for every year after that.

a. which investment has the higher irr?

b. which investment has the higher npv when the cost of capital is 5.2 %?

c. in this case, for what values of the cost of capital does picking the higher irr give the correct answer as to which investment is the best opportunity?

Security a has a higher standard deviation of returns than security b. we would expect that: (i) security a would have a risk premium equal to security b. (ii) the likely range of returns for security a in any given year would be higher than the likely range of returns for security b. (iii) the sharpe ratio of a will be higher than the sharpe ratio of b. (a) i only (b) i and ii only (c) ii and iii only (d) i, ii and iii

There are three factors that can affect the shape of the treasury yield curve (r* t , ip t , and mrp t ) and five factors that can affect the shape of the corporate yield curve (r* t , ip t , mrp t , drp t , and lp t ). the yield curve reflects the aggregation of the impacts from these factors. suppose the real risk-free rate and inflation rate are expected to remain at their current levels throughout the foreseeable future. consider all factors that affect the yield curve. then identify which of the following shapes that the us treasury yield curve can take. check all that apply.a. downward-sloping yield curveb. upward-sloping yield curvec. inverted yield curve

When making broccoli cream soup, the broccoli and aromatics should be a. burned. b. simmered. c. puréed. d. sweated.