You are considering investing in a 1-year project with a rate of return of 12%. How...
You are considering investing in a 1-year project with a rate of return of 12%. How much will you need to invest to earn a payoff of $1000 upon completion of the project?
Homework Answers
Amount need to invest = $1000/0.12 =$ 8,333.33
If you invest $ 8,333.33 for one year at rate of return 12% then you will get $8,333.333×0.12= $1000.
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