Imagine that you are faced with three alternative projects, each of which costs $1 Million (M). Assuming
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Imagine that you are faced with three alternative projects, each of which costs $1 Million (M). Assuming the discount rate of 10 percent and efficiency is your only criterion, which one of these projects would you choose to undertake?
Project A: A bridge which takes one year to build, then yields $400,000 benefit per year for the next 2 years. Assume that the costs are paid upfront.
Project B: Temporary classrooms for schools yielding $400,000 benefit per year for three years starting from Y1. Assume that all costs are paid in Y1.
Related Book For
Molecular Cell Biology
ISBN: 978-1429234139
7th edition
Authors: Harvey Lodish, Arnold Berk, Chris A. Kaiser, Monty Krieger, Anthony Bretscher, Hidde Ploegh, Angelika Amon, Matthew P. Scott
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