You have no items in your shopping cart.

T. Rowe Price Associates
Frey, Sherwood C. Jr.; Case, Edward R. Case QA-0295 / Published April 5, 1983 / 8 pages.
Format Price Quantity Select
PDF Download
$6.75
EPUB Download
$6.75
Master Hard Copy
$7.00
Student Hard Copy
$7.00
Copyright Permissions
$3.75

Product Overview

Peter Gordon, manager of a $1.6 billion investment in municipal securities at Price, has just received phone calls from the sales representatives of two investment banks, each offering attractive opportunities for the reinvestment of $50 million that will shortly become available. He may choose either but not both of the offers. The case can be used to review the contents of a "tombstone," to reinforce NPV and IRR concepts, to witness the inappropriateness of using IRR as a selection criterion among mutually exclusive projects, and to emphasize the reinvestment assumption of IRR.

  • Overview

    Peter Gordon, manager of a $1.6 billion investment in municipal securities at Price, has just received phone calls from the sales representatives of two investment banks, each offering attractive opportunities for the reinvestment of $50 million that will shortly become available. He may choose either but not both of the offers. The case can be used to review the contents of a "tombstone," to reinforce NPV and IRR concepts, to witness the inappropriateness of using IRR as a selection criterion among mutually exclusive projects, and to emphasize the reinvestment assumption of IRR.

  • Learning Objectives