(a) The IRR-maximizing investment choice of C0 is an epsilon. The IRR is then close to infinity....
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(a) The IRR-maximizing investment choice of C0 is an epsilon. The IRR is then close to infinity. The NPV is 0.
(b) The NPV-maximizing (and best) choice is an investment of $226,757. This also happens to be the project’s NPV. The IRR is 110%.
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