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3. You are offered an investment with the following conditions: The cost of the investment is 1,000. The investment pays out a sum X at
3. You are offered an investment with the following conditions: The cost of the investment is 1,000. The investment pays out a sum X at the end of the first year; this payout grows at the rate of 10% per year for 11 years. If your discount rate is 15%, calculate the smallest X which would entice you to purchase the asset. For example, as you can see in the following display, X = $100 is too smallthe NPV is negative:
Please solve by using Excel.
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