Solution-Approved a large capital project

Approved a large capital project

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Reference no: EM131473917

Let's assume that you've approved a large capital project based on a positive NPV. After you start the construction process, the federal reserve raises interest rates. Whereas your bank was only paying you 3% on deposits before, now they are willing to pay 6%, and it is anticipated to stay there a long time. If you were to re-calculate your NPV, what would be the impact? Why? I need a paragraph of explanation.

Reference no: EM131473917

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Approved a large capital project

Reference no: EM131473917

Reference no: EM131473917

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