A company has an investment project that would cost $10 million today and yield a payoff of
Question:
a. Should the firm undertake the project if the interest rate is 11 percent 10 percent? 9 percent? 8 percent?
b. Can you figure out the exact cutoff for the interest rate between profitability and non profitability?
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a The present value of 15 million to be received in four years at an interest rate of 11 is 15 milli...View the full answer
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