Cost-benefi t analysis. Suppose an investment project yields a profi t of $100 every year, starting one
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Cost-benefi t analysis. Suppose an investment project yields a profi t of $100 every year, starting one year after the investment takes place. Assume the interest rate for computing present values is 5 percent.
(a) If F = $1,000, is the investment worth undertaking?
(b) What if F = $5,000?
(c) What is the cutoff value for F that just makes the investment worthwhile?
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Related Book For
Introduction To Economic Growth
ISBN: 9780393919172
3rd Edition
Authors: Charles I. Jones, Dietrich Vollrath
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