What is the return expected on investment measured in dollar

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Reference no: EM132778558

Consider the following investment cash flows:

Year. Cash Flow

0 -$1.000

1 - $250

2 $400

3 $500

4 $600

5 $600

Problem a. What is the return expected on this investment measured in dollar terms if the opportunity cost rate is 10 percent?

Problem b. Provide an explanation, in economic terms, of your answer.

Problem c. What is the return on this investment measured in percentage terms?

Problem d. Should this investment be made? Why?

Reference no: EM132778558

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