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Can you explain these three questions? 5. The Greasy Spoon Restaurant is considering a project with an initial cost of $475,000. The project will not
Can you explain these three questions?
5. The Greasy Spoon Restaurant is considering a project with an initial cost of $475,000. The project will not produce any cash flows for the first three years. Starting in year 4, the project will produce cash inflows of $802,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 18 percent. What is the project's net present value? 586,310 6. You can afford 550/month for a car and have been approved by a local bank for a 5 year loan at 1.9% annual rate. How expensive of a car can you purchase? 31,457.25 7. You deposit $10,000 into a bank which promises to pay you 5.75% compounded semiannually for 10 years. How much will you have at the end of the 10 years? 17,627.75Step by Step Solution
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