Question
4) Consider a bright but penniless entrepreneur living in a 5 period perfect capital market under certainty. The market rate of interest is 10% or
| 4) Consider a bright but penniless entrepreneur living in a 5 period perfect capital market under certainty. The market rate of interest is 10% or r=0.1 | ||||||||||
| S/he has a project that requires an investment of $250 at t=1 with the following payoff profile in the future |
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| t=2 | t=3 | t=4 | t=5 |
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| 110 | 121 | 133,1 | 146,41 |
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| a) What is the market value of this project? |
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Public Finance In Canada
Authors: Harvey S. Rosen, Ted Gayer, Jean-Francois Wen, Tracy Snoddon
5th Canadian Edition
1259030776, 978-1259030772
