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Monthly internal rate of return

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Reference no: EM133062225

As a graduation present, your parents offer you two alternatives: (assume end of month)

Alternative A: $2,000 cash June 1

Alternative B: $150 June 1 and $100 per month for 20 months beginning July 1

a) At what monthly internal rate of return are the two alternatives equivalent?

b) Which alternative would you pick if the monthly rate of return is 0.85%

Reference no: EM133062225

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