Essay
A construction project requires an initial investment of 2,000,000. The one and only return next year is estimated to be 2,500,00.
If the firm uses a discount rate of 10%, what is the net present value of the project?
What is the NPV of the project if the firm uses certainty-equivalent approach with certainty-equivalent coefficient of 0.9 and a risk-free rate of 4%?
Correct Answer:
Verified
Correct Answer:
Verified
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