Microsoft company is considering an investment project which costs $3 million today and its payoff would be $5 million at the end of year 7. If the interest rate is 9%, should Microsoft invest in the new project?

Microsoft company is considering an investment project which costs $3 million today and its payoff would be $5 million at the end of year 7. If the interest rate is 9%, should Microsoft invest in the new project?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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Microsoft company is considering an investment project which costs $3 million today and its payoff would
be $5 million at the end of year 7. If the interest rate is 9%, should Microsoft invest in the new project?

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