the cash flows cft associated with an investment, Macroeconomics

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the cash flows cft associated with an investment

The cash flows (CF_t) associated with an investment are listed below (assume that each cash flow occurs at the beginning of each year):

CF₀ = -200

CF₁ = 100

CF₂ = 120

Should the firm undertake this project if:

a. The interest rate is 5 percent (and what is the project's NPV).

b. The interest rate is 10 percent (and what is the project's NPV).

c. What interest rate would leave the firm indifferent to the investment decision?

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Macroeconomics: the cash flows cft associated with an investment

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Macroeconomics: the cash flows cft associated with an investment

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