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Year 0 1 2 3 4 5 Initial investment (3,500) Cash-in from operating 200 220 240 260 300 Cash-in from liquidation 5,200 Q1.1. Should you invest into the project if your opportunity cost of capital is 20

Year 0 1 2 3 4 5 Initial investment (3,500) Cash-in from operating 200 220 240 260 300 Cash-in from liquidation 5,200 Q1.1. Should you invest into the project if your opportunity cost of capital is 20

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
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The project shows the cash flows as the following: Year 0 1 2 3 4 5 Initial investment (3,500) Cash-in from operating 200 220 240 260 300 Cash-in from liquidation 5,200 Q1.1. Should you invest into the project if your opportunity cost of capital is 20%? Q1.2. Should you invest into the project if your opportunity cost of capital is 10%? Q1.3. Please give your comments on the problems.
Transcribed Image Text:The project shows the cash flows as the following: Year 0 1 2 3 4 5 Initial investment (3,500) Cash-in from operating 200 220 240 260 300 Cash-in from liquidation 5,200 Q1.1. Should you invest into the project if your opportunity cost of capital is 20%? Q1.2. Should you invest into the project if your opportunity cost of capital is 10%? Q1.3. Please give your comments on the problems.
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