1.5. Equation (15.5) (page 563) shows the net present value of an investment in an electric motor...

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1.5. Equation (15.5) (page 563) shows the net present value of an investment in an electric motor factory. Half of the $10 million cost is paid initially and the other half after a year. The factory is expected to lose money during its first two years of operation. If the discount rate is 4 percent, what is the NPV? Is the investment worthwhile?

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Microeconomics

ISBN: 9780132080231

7th Edition

Authors: Robert S. Pindyck, Daniel L. Rubinfeld

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