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An asset costs $10,000 now. It will return a perpetuity R$400 per year with no risk. (The dollar amount paid out will grow in proportion
An asset costs $10,000 now. It will return a perpetuity R$400 per year with no risk. (The dollar amount paid out will grow in proportion to the rate of inflation.) The time value of the money is 10 percent. Is this a desirable investment if the expected rate of inflation is 8 percent? Ex-plain. Ignore taxes. Illustrate your explanation with a simple numerical example, if possible
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