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Answer the question.
-You put $422 per month in an investment plan that pays an APR of 3%. How much money will you have after 25 years? Compare this amount to the total amount of deposits made over the time
Period.
Net Present Value (NPV)
A calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate, to determine the project’s profitability.
Internal Rate of Return (IRR)
A method of calculating an investment's rate of return that makes the net present value of all cash flows equal to zero.
Mutually Exclusive Investments
Mutually exclusive investments are investment options where the choice of one alternative precludes the selection of another, requiring a careful comparison to choose the best option.
Capital Rationing
Occurs when investors or management place a constraint on the size of the firm’s capital budget during a particular period.
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