Question
An investment has a cost of $3800. The investment will have a payout of X at the end of the first year. This initial payout
An investment has a cost of $3800. The investment will have a payout of X at the end of the first year. This initial payout X will grow at the rate of 10% per year for the next 3 years, then by 8% per year for the next 3 years, and then at the rate of 4% per year for the following 5 years. You believe the riskiness of this investment is 10%.
a. Calculate the smallest X that would entice you to invest.
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Cost Accounting A Managerial Emphasis
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