Question: A firm is considering a project which involves investing $100 now for a return of $112 a year from now. What are the values of
A firm is considering a project which involves investing $100 now for a return of $112 a year from now. What are the values of the following variables?
i the marginal productivity of the capital investment;
ii the internal rate of return on the project;
iii the net present value of the project, using a 5% discount rate;
iv the project benefit/cost ratio.
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