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Consider a project with these CFs: Time CF 0 10,000 (PVtot or CFO) 1 2.5 1,000 11,000 Which is closest to the interest rate
Consider a project with these CFs: Time CF 0 10,000 (PVtot or CFO) 1 2.5 1,000 11,000 Which is closest to the interest rate (discount rate) of this project? Hint: Write the complete fundamental discounting equation for this problem ("PVtot =" or "CFo="), putting in numbers for everything but r. Then substitute in the given values of r. The r that makes the equation an equality is the correct r.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
