Consider the following information underlying a potential investment opportunity: Cash Flow $5,000 2 $10,000 $15,000 4-10...
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Consider the following information underlying a potential investment opportunity: Cash Flow $5,000 2 $10,000 $15,000 4-10 $20.000 The investment is expected to cost $42,000. The discount rate is 10%. Year a. If you are offered $30,000 today, would you accept this amount or go for the proposed investment? Show your calculations and explain your decision. b. How would an increase in the discount rate affect your initial decision? Explain. Consider the following information underlying a potential investment opportunity: Cash Flow $5,000 2 $10,000 $15,000 4-10 $20.000 The investment is expected to cost $42,000. The discount rate is 10%. Year a. If you are offered $30,000 today, would you accept this amount or go for the proposed investment? Show your calculations and explain your decision. b. How would an increase in the discount rate affect your initial decision? Explain.
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a No I would not accept the 30000 today The present value of ... View the full answer
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