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The following investment has an internal rate of return of 20% 0 1 2 -1000 700 600 and it is to be financed by the

The following investment has an internal rate of return of 20%

0 1 2
-1000 700 600

and it is to be financed by the following loan at the cost of financing of 15%

0 1 2
400 -260 -230

The opportunity cost of capital of a decision maker has the following term structure:

h(0)(0,1)=4%, h(0)(1,2)=6%.

What are the GAPV period quotas?

Find represent the period equity quota (P) and debt quota (D) over periods 1 and 2 rispectively).

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