Should investor invest in thr given project

Reference no: EM132173512

Question: An investor is offered a project that needs an initial investment of $240,000. The investment produces a net profit of $20,000 in the first year increasing by $10,000 each year for five years after that (a total project duration of six years), with a final payment of $15,000 at the termination (end of the sixth year). If the inflation rate is assumed to be a constant for the next 10 years at 4.545% per year, and the prevailing market interest rate is estimated to be 15% per year for the duration of the project, should he invest in this project? Ignore tax.

Reference no: EM132173512

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