How will they undertake the project

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Reference no: EM131955030

Question: Cash Rich has no debt. For simplicity assume that its only accounting asset is $1000 in cash, and it has 10 shares outstanding Ignore taxes. The managers at cash rich are considering a project that will require an investment of $500 and is expected to yield a return of 15% The can make 20% return elsewhere for investments of comparable risk. If CashRichs managers are rewarded on the bases of earnings per share, will they undertake this project?

Reference no: EM131955030

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