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An investor is willing to invest $10 million in the project you have been promoting within your firm. His required rate of return is 7%.

An investor is willing to invest $10 million in the project you have been promoting within your firm. His required rate of return is 7%. Using this discount rate of 7%, the project's NPV is $1.5 million. You have already told your board that this project should have a 10% required rate of return to justify its risk.

Should you compromise with a discount rate between 7% and 10% in discussing with your board? Why and why not?

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