3. There are 3 mutually exclusive investments: A, B, and
C, which of the 3 should be chosen if you can only choose one?
Suppose you are restricted only to investing a total of 11,000,
what would you do? Assume a cutoff of 10%.
Investment
0
1
2
3
IRR (%)
A
(1,000)
505
505
505
24
B
(10,000)
2,000
2,000
12,000
20
C
(11,000)
5,304
5,304
5,304
21