Question: QUESTION 12 Assume a two period perfect certainty world. A firm has the following investment opportunities: Project Period 1 Outlay Period 2 Return A 100,000

QUESTION 12 Assume a two period perfect certainty world. A firm

QUESTION 12 Assume a two period perfect certainty world. A firm has the following investment opportunities: Project Period 1 Outlay Period 2 Return A 100,000 120,000 B 150,000 162,000 200,000 226,000 D 300,000 333,000 The firm has an initial endowment of $500,000 and the market rate of return is 10.009. Assuming that the firm faces no capital constraints, what is the firm's value if it decides to undertake all value-added projects? a. $514,545 b. $517,273 C. $775,456 d. $815,000 e. None of the above

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