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A company has been invited to invest $4 millions in partnerships and recieve a guaranteed total amount of $10 million after 6 years. By the
A company has been invited to invest $4 millions in partnerships and recieve a guaranteed total amount of $10 million after 6 years. By the corperate policy the NARR is always at 2% above the cost of capital. The inflation rate during the 6 years is expected to average 4% per year. If the real interest rate paid on capital is 12% per year, is this investment economically justified?
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