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Question 3 Suppose the IRR of a project is 1 4 % . Your required return is also 1 4 % . How much will

Question

3

Suppose the IRR of a project is

14 % .

Your required return is also

14 % .

How much will the firm value increase

/

decrease if you accept this project?

Firm value will increase by

14 %

of the initial investment

Firm value will neither increase nor decrease.

Firm value will decrease by

14 %

of the initial investment

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