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Author Question: ABC Corp. is considering an investment project that costs $500 today. It expects the project will ... (Read 131 times)

DyllonKazuo

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Question 1

ABC Corp. is considering an investment project that costs $500 today. It expects the project will yield income of $200 at the end of years 1, 2, and 3. If the interest rate is 10%, the firm


◦ should undertake the investment.
◦ should forgo the investment.
◦ is just indifferent between undertaking the investment and not.
◦ indeterminate from the given information

Question 2

ABC Corp. is considering an investment project that costs $500 today. It expects the project will yield income of $200 at the end of years 1, 2, and 3. The interest rate must be ________ for the firm to undertake the project.


◦ at least 11%
◦ no more than 9%
◦ exactly equal to 10%
◦ It is indeterminate from the given information.


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Marked as best answer by DyllonKazuo on Apr 19, 2019

hramirez205

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