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Given: P100,000 cost of equipment P120,000 net expected revenue 10 % interest rate 18 % nominal interest rate 9 % ongoing infl. rate Compute the

Given:

P100,000 cost of equipment

P120,000 net expected revenue

10 % interest rate

18 % nominal interest rate

9 % ongoing infl. rate

Compute the ff.: Show complete solution.

1.Profit

2.Rate of return ( r)

3.Interest cost

4.Real interest rate

5.Is it profitable/unprofitable?Why and why not?

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