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Investment requires an immediate outlay

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Suppose an investment requires an immediate outlay of $100000 but will generate cashflows of $25000 from years 2 through years 6. You can borrow $60000 of the required amount at an interest rate of 9% p.a., while you have the remaining $40000 needed in your bank account that generates 4% p.a. for you. Should you undertake this investment?

Reference no: EM131908395

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