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A project requiring an initial outlay of BHD 20,000 is guaranteed to produce a return of BHD 30,000 in five (5) years. a. In order
A project requiring an initial outlay of BHD 20,000 is guaranteed to produce a return of BHD 30,000 in five (5) years. a. In order to decide whether this investment is worthwhile, use the following methods considering that the prevailing market rate is 4% compounded annually: i. Net Present Value (NPV), and the [8 marks] ii. Internal Rate of Return (IRR). [9 marks] b. Evaluate your investment if the interest rate were 9% instead of 4%. [8 marks]
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