ECONOMICS 300
Howard university
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Case Study: The Investment Detective (complete solution guide)
- Study guide • 4 pages • 2020
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The investment Detective

Answer Q1:

We can rank the projects by simply inspecting the cash flows (mention bellow), yet it’s not a good measure to rank them.

We can’t rank the projects by only simple inspection of the cash flows because of the time value of money and cost of capital of companies. We use capital budgeting tools to measure financial performance of projects.

The Ranking by simply inspecting the cash flows:

Rank

1st

2nd

3rd

4th

5th

6th

7th

8th

Projects

3

5

8

4

...
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