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You are planning to place your money in safe government securities, which currently offer a 3% rate of return. Before making this investment, an entrepreneur
You are planning to place your money in safe government securities, which currently offer a 3% rate of return. Before making this investment, an entrepreneur approaches you and asks you to purchase his new business venture, Mightyscoot, a personal transport device, that would produce a single cash inflow of $190,000 at the end of the year. It is a risky investment and you have determined that 6% is an appropriate risk premium for this investment. How much would you be willing to pay for Mightyscoot
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