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Author Question: Dynaflex Corp. is considering an investment project that costs $900 today. It expects the project ... (Read 1423 times)

RODY.ELKHALIL

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Question 1

Tomʹs Donuts can invest in a new espresso machine that costs $500 and will yield expected profits of $350 each year for two years. At higher interest rates, the present discounted value of profits from the investment


◦ increases.
◦ decreases.
◦ is unchanged.
◦ is indeterminate from the given information.

Question 2

Dynaflex Corp. is considering an investment project that costs $900 today. It expects the project will yield income of $350 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


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Marked as best answer by RODY.ELKHALIL on Apr 19, 2019

tennis14576

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