Question: Show work Please. Thank you. Problem 2 CVC supplies power to the city of Cali in Columbia, South America. They are planning to build a

Show work Please. Thank you. Problem 2 CVC supplies power to

Show work Please. Thank you.

Problem 2 CVC supplies power to the city of Cali in Columbia, South America. They are planning to build a dam to meet the city's burgeoning power needs. The dam will cost $7.5 million up front to build and will begin producing electricity the following year. The production of electricity is valued at $900,000/yr and the dam will produce a constant value for 17 years at which time it must be closed due to siltation. a. If the real interest rate is 7%, what is the net present value of the project? At 4%? b. What is the annuity stream equivalent of this net present value? At 7%? At 4%

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