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We can invest SEK 1 5 0 0 , today, in a project which yields a perpetual, yearly cash flow of SEK c , starting
We can invest SEK today, in a project which yields a perpetual, yearly cash flow of SEK c starting in one year from today. c takes on the same value each year, and can either be equal to SEK or to SEK with respective probabilities and We are a riskneutral decision maker, and we discount future cash flows at the rate of
What would be the net present value of the project, if we had to decide whether to invest or not without knowing the actual value of c
What would be the net present value of the project, i if we learned that the actual cashflow from the investment is equal to SEK ii if we learned that the actual cashflow from the investment is equal to SEK In which cases if any, should we invest in the project?
Suppose that we can actually identify the actual value of c today, at the cost of SEK Should we take advantage of this opportunity? Dear Expert, kindly provide comprehensive notes and calculations to this for me Thank you
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