A tax-exempt, private university is considering whether to build a new dormitory. The university's financial vice president
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A tax-exempt, private university is considering whether to build a new dormitory. The university's financial vice president has the following facts. The university plans to start construction in 2009 and will complete it in two years at a total cost of $10 million. The university estimates that the building, once completed, will generate cash flows (from room charges) of $2 million per year for 20 years. The university's cost of borrowing is 10 percent. Would you recommend going ahead with the dormitory?
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Related Book For 
Managerial Economics
ISBN: 9781119554912
5th Edition
Authors: William F. Samuelson, Stephen G. Marks
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