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Playworld Is Thinking About Investing in a New Theme Park

question 36

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Playworld is thinking about investing in a new theme park. Suppose that the project costs $7 million and will yield the company $20 million in 10 years. If the interest rate is 5%, what is the present value of the yield in 10 years? What will be the future value of the $7 million investment? Should Playworld invest in the project?


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