Invested in a business that proudly reports

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Reference no: EM131048513

You have invested in a business that proudly reports that it is profitable. Your investment of $5000 has produced a profit of $300. The managers think that if you leave your $5000 invested with them, they should be able to generate $300 per year in profits for you in perpetuity. Evaluating other investment opportunities, you note that other long-term investments of similar risk offer an expected return of 8%. Should you remain invested in this firm?

Reference no: EM131048513

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