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You are a strong advocate for a one - year investment project that would cost your firm $ 1 0 , 0 0 0 today

You are a strong advocate for a one-year investment project that would cost your firm
$10,000 today but generate virtually certain earnings of $15,000 at year-end. Your firm would have to borrow $10,000 for one year at an interest rate of 20 percent if it wanted to invest in this project. You may use 20 percent as the discount factor. Should your firm invest in this project? Use the concept of present value in answering this question. Please give an explanation and show your calculations.

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