Jared Smithers was faced with a particularly difficult decision. His aunt Lucy Johnson has offered Jared the
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Jared Smithers was faced with a particularly difficult decision. His aunt Lucy Johnson has offered Jared the opportunity to help fund her new beauty shop. She has asked him to invest $100,000 immediately in her business. She convinces him that the cash flow of such an investment would result in positive cash flows of $21,000 per year for at least 7 years. Jared’s hurdle rate is 8%.
Using sound capital budgeting techniques for support your recommendation, help Jared out on his first major decision. Jared has the money to invest currently in a CD due to mature on November 30.
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