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3. A business venture requires an initial investment of $50,000 and a further investment of $20,000 in a year's time. The venture will produce an

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3. A business venture requires an initial investment of $50,000 and a further investment of $20,000 in a year's time. The venture will produce an income of $2,000 in two years' time, $2,500 in three years' time, $3,000 in four years' time, and so on, the final income being $6,000 in ten years' time. a) Using the linear interpolation method with initial guesses of-9% and -10% to find the internal rate of return for this project b) An investor has no spare cash, but may borrow money at any time at a fixed interest rate of 6% per annum, all loans being repayable in whole or in part at any time at the borrower's discretion. The investor is con- sidering borrowing to finance the venture described above. Should he undertake the venture and if so, what will his profit be in ten years' time on the completed transaction

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