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A Construction Project Requires an Initial Investment of 1,000,000

Question 108

Essay

A construction project requires an initial investment of 1,000,000. The one and only return next year is estimated to be 2,200,00.
If the firm uses a discount rate of 10%, what is the net present value of the project?
What is the NPV if the firm uses a 20% risk-adjusted discount rate?

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