Guarantee paying the firm

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A firm is considering a project which would guarantee paying the firm $5,000 in two years and $15,000 in three years. Which of the following statements are true?

I. If the rate of return of the project is 5%, then the project costs approximately $17,493

II. If the project costs $16,000, then you should do the project if the cost of the money is 4%

III. If borrowing money costs 8%, then investing in this project at a cost of $18,500 is a good idea even if the firm does not have the money on hand.

Reference no: EM132500480

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