Question: You have a project costing $1.50 that will produce two widgets, one each the first and second years after project completion. Widgets today cost $0.80

You have a project costing $1.50 that will produce two widgets, one each the first and second years after project completion. Widgets today cost $0.80 each, with the price growing at 2% per year. The effective annual interest rate is 5%. When will you invest? What is the value today of the project?

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If you invest at time T you receive at time T an NPV 15 102 T X 15 where X 08 102105 08 102105 ... View full answer

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