Question
MTM Ltd. wants to earn 14.25 percent on its current investments after inflation. Inflation is expected to average 2.8 percent over the next 5 years.
MTM Ltd. wants to earn 14.25 percent on its current investments after inflation. Inflation is expected to average 2.8 percent over the next 5 years. What discount rate should MTM assign to a 5-year project assuming the project has the same level of risk as the firm's current operations?
answer: 17.45%
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Personal Finance Turning Money into Wealth
Authors: Arthur J. Keown
8th edition
134730364, 978-0134730363
