The present value of the investment cost of a project that is completed at the beginning of year 0 is 1000. If the costs stay at the same level (in real present value terms no matter when the project is completed) while the real net benefits grow over time according to the following schedule:
Year |
1 |
2 |
3 |
4 |
5 |
Net benefits |
50 |
70 |
90 |
120 |
150 |
The opportunity cost of alternative investments r is 10%.
Answer:
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