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12% per year 5 years $5,000 MARR Useful life Initial investment Receipts-Expenses (R – E) $1,500/year Graph for Problems 11-35 to 11-39 Initial (R – E) Useful Life Investment $3,000 $2,000 $1,000 - so 40% -30% -20% -10% 0% 10% 20% 30% 40% ($1,000) ($2,000) X-Axis (Percent Change in Parameter) Y-Axis, PW(12%)

12% per year 5 years $5,000 MARR Useful life Initial investment Receipts-Expenses (R – E) $1,500/year Graph for Problems 11-35 to 11-39 Initial (R – E) Useful Life Investment $3,000 $2,000 $1,000 - so 40% -30% -20% -10% 0% 10% 20% 30% 40% ($1,000) ($2,000) X-Axis (Percent Change in Parameter) Y-Axis, PW(12%)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Answer the problems on the basis of the above graph and the most likely estimates given as follows: If the initial investment is increased by more than 9%, the project is profitable. (a) True (b) False. 

12% per year 5 years $5,000 MARR Useful life Initial investment Receipts-Expenses (R – E) $1,500/year
Transcribed Image Text:12% per year 5 years $5,000 MARR Useful life Initial investment Receipts-Expenses (R – E) $1,500/year
Graph for Problems 11-35 to 11-39 Initial (R – E) Useful Life Investment $3,000 $2,000 $1,000 - so 40% -30% -20% -10% 0% 10% 20% 30% 40% ($1,000) ($2,000) X-Axis (Percent Change in Parameter) Y-Axis, PW(12%)
Transcribed Image Text:Graph for Problems 11-35 to 11-39 Initial (R – E) Useful Life Investment $3,000 $2,000 $1,000 - so 40% -30% -20% -10% 0% 10% 20% 30% 40% ($1,000) ($2,000) X-Axis (Percent Change in Parameter) Y-Axis, PW(12%)
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