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Consider a project with these CFs: Which is closest to the interest rate (discount rate) of this project? Hint: Write the complete fundamental discounting equation
Consider a project with these CFs: 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. \begin{tabular}{l} \hline 10% \\ \hline 12% \\ \hline 8% \\ \hline 6% \\ \hline \end{tabular}
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