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A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years. (a) Should the
- A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years.
- (a) Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent?
- (b) Can you figure out the exact cutoff for the interest rate between profitability and non profitability?
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Managerial Economics
Authors: Paul Keat, Philip K Young, Steve Erfle
7th edition
0133020266, 978-0133020267
