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After these previous calculations, the project still requires a big initial investment, and other options are being considered. Another project, that consists of just readjusting
After these previous calculations, the project still requires a big initial investment, and other options are being considered. Another project, that consists of just readjusting some parts to adapt them to assemble to electric cars, would produce net revenues of $190,000 per year, for 10 years. Assuming that these revenues will grow at a constant 1% per year, and are assessed at a cost of capital of 4%:
- Would it still be profitable if it required an initial investment of $1,500,000?
- If we take these annual revenues of $190,000 growing at a 1% per year, and we invest them in a bank account that offers an annual rate of 5% for 10 years, how much will we have at the end?
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