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Sara Holliday must earn a return of 7 % on an investment that requires an initial outlay of $2,400 and promises to return $6,200 in

Sara Holliday must earn a return of 7 % on an investment that requires an initial outlay of $2,400 and promises to return $6,200 in 11 years.

a. Use present-value techniques to estimate the yield on this investment.

b. On the basis of your finding in part a , should Sara make the proposed investment? Explain.

a. The yield on this investment is

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