Peter Gordon, manager of a $ 1600000000 investment in municipal securities price has just calls from the field staff of two investment banks, which all come with attractive opportunities for the reinvestment of $ 50 million will be available shortly. He can choose either, but not both offers. The case can be used to check the contents of a “grave stone”, to enhance NPV and IRR concepts to be the inappropriateness of using IRR as a selection criterion witness … Read more »

Peter Gordon, manager of a $ 1600000000 investment in municipal securities price has just calls from the field staff of two investment banks, which all come with attractive opportunities for the reinvestment of $ 50 million will be available shortly. He can choose either, but not both offers. The case can be used to check the contents of a “grave stone”, to enhance NPV and IRR concepts attest to the inadequacy of using IRR as a selection criterion among mutually exclusive projects, the IRR reinvestment assumption to emphasize.

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from
Sherwood C. Frey, Jr.,
Edward R. Case
Source: Darden School of Business
8 pages.
Release date: 05 April, 1991. Prod #: UV6116-PDF-ENG
T. Rowe Price Associates HBR case solution