Question: Concept 3 ! Evaluate an Investment Project Problem 3 . 1 : A three - year project has initial cost 8 1 , 0 0

Concept 3! Evaluate an Investment Project
Problem 3.1: A three-year project has initial cost 81,000 and has IRtR 15%. The first-year cash flow is $500 and the mecond ywar-onsh flow is $400.
What is the third year canh flow?
If the spot rates with maturities 1,2 and 3 years are 8%,10% and 12% rempectively, should you invest in the project? /Can you reapond writhont solving it l]
Problem 3.2: You evaluate the following projocts, when the required rate of return (dincount rate) is 8% for every maturity:
\table[[Period,A,B,C],[0,-300,-200,-100],[1,200,150,30],[2,150,120,T7
Concept 3 ! Evaluate an Investment Project

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