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Mr. Dell has $120 in income this year and will have zero income next year. The expected return from investing in the stock market is
Mr. Dell has $120 in income this year and will have zero income next year. The expected return from investing in the stock market is 10 percent a year. Mr. Dell also has an investment opportunity-having the same risk as the market in which he can invest $20 this year and receive $120 next year. Suppose Mr. Dell consumes $50 this year and invests in the project. What is the NPV of the investment opportunity? Multiple Choice $59.09 $0 none of the options $8
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