Basic assumptions used in economic evaluation techniques

Assignment Help Operation Management

Reference no: EM132252392

You have a sum of $10,000 available for investments. You are offered two options:

Deposit the sum in a bank for 3 years, with an interest rate of 10% compounded annually. The bank is also prepared to take on any additional investments at the same rate at any time for the next 3 years.

Invest the $10,000 in a project with an annual return of $4200. The project life is 3 years.

Which is the preferred option? Explain your answer.

Note: This question highlights one of the basic assumptions used in economic evaluation techniques.

Reference no: EM132252392

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