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A capital investment of $40,000 can be made in a project that will produce uniform annual revenue of $9,000 for 7 years at an expense
A capital investment of $40,000 can be made in a project that will produce uniform annual revenue of $9,000 for 7 years at an expense of $1, 500 each year, and then the project terminates and has a zero salvage value. a. If the MARR is 9% is this a good investment? b. What is the internal rate of return (IRR) of the project? c. Suppose the project has a salvage value of $15,000 at the end of the 7th year. How much is IRR now? d. Suppose that the salvage value at the end of the 7th year is remains $15,000 and the revenues and expenses stay the same, and the external reinvestment rate (epsilon) is 12% annually, what is the external rate of return (ERR) project
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