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Excel file of question Southeast Clinic is assessing an investment with the following budgeted cash flow stream: Year Cash Flow 0 (300,000) 1 25,000 2
Excel file of question
Southeast Clinic is assessing an investment with the following budgeted cash flow stream: | ||||||||
Year | Cash Flow | |||||||
0 | (300,000) | |||||||
1 | 25,000 | |||||||
2 | 50,000 | |||||||
3 | 75,000 | |||||||
4 | 100,000 | |||||||
5 | 125,000 | |||||||
a. What is the expected return on this investment measured in dollar terms if the opportunity cost rate is 7%? (2 points) | ||||||||
b. What is the return expected on this investment measured in percentage terms? (2 points) | ||||||||
c. Should this investment be made? Explain your answer.(4 points) |
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