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tell me wether i should invest or no and why? why did you use the formula you using to solve the problem ? please guve
tell me wether i should invest or no and why? why did you use the formula you using to solve the problem ?
Question A firm is trying to decide whether to invest on not on a project related to the production of a very special machine. The factory to produce it will cost 1600mil and will produce one such machine per year forever with zero operating cost. Currently the price of such a machine is 200mil but next year the price will change. With probability 50% it will rise to 300mil and with probability 50% it will fall to 100mil. The price then will remain at the same level forever. If the appropriate discount rate for this project is 10% is this a good investment please guve explanation details
thank you
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