Question: 2. Suppose GM has a new project that would cost $11 million today and yield a payoff of $20 million in 6 years. a. should

2. Suppose GM has a new project that would cost $11 million today and yield a payoff of $20 million in 6 years.

a. should GM 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 of this project?

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