You are offered an investment in a new store. For this problem, assume away taxes. The store will sell furniture, and historically furniture prices have kept pace with inflation. The current revenue from the store is 20K a year. The current nominal interest rate is 7% and inflation is running at 3% a year. You expect this trend to continue for the 10 years of the contract. Should you make the required 140K investment?
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You are offered an investment in a new store. For this problem, assume away taxes. The store will se...
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