A project requires an initial investment of $10 million today. If the cost of capital exceeds the project IRR, then the project
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The effective annual yield of a treasury bill is equivalent to 12.55%.
Option B is the correct answer.
<h3>What is the treasury bill?</h3>The treasury bill is the trading instrument that is issued in the money market by the government.
Given values:
Par value: $100,000
Future value: $97,087
Number of years from now: 3 years
Step-1 Computation of interest rate of treasury bill:
Step-2 Computation of equivalent yield the bill:
Therefore, 12.55% is the equivalent yield on the treasury bill.
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