Finance Questions

Untitled › Forums › Finance › Finance Questions

Tagged: ,

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 17, 2017 at 5:00 am #16007
    amandeep kathuria
    Member

    Are you better off if a project first returns –10% followed by +30%, or if it first returns +30% followed by –10%?

    June 17, 2017 at 5:02 am #16008
    amandeep kathuria
    Member

    Solution
    Case 1

    (1+ (-).10) * (1+.30) ^2 = .90*1.96 = 1.521 = 15.21%

    Case 2

    (1+.30) * (1+(-).10) ^2 = 1.30*.81= 1.053 = 10.53%
    Case 1 is better off.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.