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Bernard Lewis has $30,000 in cash and expects to receive a salary of $55,000 in one year. The market interest rate is 10% p.a. An
Bernard Lewis has $30,000 in cash and expects to receive a salary of $55,000 in one year. The market interest rate is 10% p.a. An investment in a business venture requires an outflow of $23,500 today and promises to pay off $40,150 in one year. Could he accept this project given that he wants to spend $10,000 today on a down payment on a car and other consumption and he has only $30,000 in hand? Why or why not? Explain in one sentence.
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