Consider the following project balances for a typical investment project with a service life of five years:
Question:
(a) Fill in the blanks by constructing the original cash flows of the project and determining the terminal balance.
(b) Determine the interest rate used in the project-balance calculation, and compute the present worth of this project at the computed interest rate.
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Project Balance -$1,000 -$1,000 -$900 $490 -$500 $0 3 4 -$100 $200
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