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Suppose that an investment opportunity, which requires an initial outlay of $100,000, is expected to yield a return of $250,000 after 30years. (i) Will the

Suppose that an investment opportunity, which requires an initial outlay of $100,000, is expected to yield a return of $250,000 after 30years.

(i) Will the investment be profitable if the cost of capital is 7%?

(ii) Will the investment be profitable if the cost of capital is 2%?

(iii) At what cost of capital will the investor be indifferent to the investment?

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