MYECON LAB W/PEARSON ETEXT MICROECON>IP
9th Edition
ISBN: 9780134153988
Author: PINDYCK
Publisher: PEARSON
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Chapter 15, Problem 4RQ
To determine
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Determine which of the two investment projects of Problem 5 the manager should choose if the discount rate of the firm is 30 percent.
Additional information. Problem 5 states determine which of two investment projects a manager should choose if the discount rate of the firm is 10 percent. The first project promises a profit of $100,000 in each of the next four years, while the second project promises a profit of $75,000 in each of the next six years.
Indicate whether the statement is true or false, and justify your answer.
1. The internal rate of return is defined as the interest rate that makes the net present value of an investment stream exactly equal to zero.
2. In part, physicians’ salaries are higher than secretaries’ salaries because it takes more years to train to become a physician than it does to become a secretary.
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If Peregrine consumes(1,500,880)and earns(1,300,1,100)and if the interest rate is10%, the present value of his endowment is
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