Determine the optimal investment project

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Determine which of the two (2) investment projects your supervisor should choose, given a discount rate of 10% from J P Morgan Chase bank. The first project generates a profit of US$ 100,000 in four (4) years, while the second, a profit of US$ 75,000 in six years.

1.1 What is the discount rate or proxy of the discount rate that should be used?

1.2 Determine the optimal investment project at the given discount rate?

1.3 Suppose the discount rate at Bank of America, is 7.5%, which project should be chosen.

Reference no: EM133084258

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