Question
If you have a project that requires you to barrow $1,000,000 from the bank for the initial investment and then the project creates a revenue
If you have a project that requires you to barrow $1,000,000 from the bank for the initial investment and then the project creates a revenue of $250,000 per year, for 5 years, starting with generating the first revenue of $250K one year after the investment and the 2nd revenue of $250K after 2 years after the investment and so on the 5th revenue of $250K will come 5 years after the investment. What would be the interest rate from the bank so this project breaks even? Would you do this project, if the interest rate is 10%? What is the profit or loss at 10%?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started