Question
Arjun is interested in opening a new branch for Habitat for Humanity, which will take $102 325 in initial startup costs but will yield $24
Arjun is interested in opening a new branch for Habitat for Humanity, which will take $102 325 in initial startup costs but will yield $24 775 in annual net returns every year for 6 years. Assume that after 6 years, there are no further benefits nor any residual value left on Arjun's investment. If the required rate of return is 10%, should he start work on the project? What if the required rate of return is 17%?
A) Yes for both rates of return.
B) Yes if the rate of return is 17%, No if the rate of return is 10%.
C) No for both rates of return.
D) Yes if the rate of return is 10%, No if the rate of return is 17%.
E) More information is required.
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