Question: You are a strong advocate for a one - year investment project that would cost your firm $ 1 0 , 0 0 0 today
You are a strong advocate for a oneyear investment project that would cost your firm
$ today but generate virtually certain earnings of $ at yearend. Your firm would have to borrow $ for one year at an interest rate of percent if it wanted to invest in this project. You may use percent as the discount factor. Should your firm invest in this project? Use the concept of present value in answering this question. Please give an explanation and show your calculations.
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