Econ Public Finance, please help!
Homework Answers
NPW at 4% = -4000 m + 400m*(P/A, 4%,10)
= -4000 m + 400m*8.110896
= -755.64 m
As NPW is negative, it is not worth it
When I = 0%
NPW = -4000m + 400m * 10 = 0
As NPW is zero, it is not worth it
When I = 8%
NPW at 8% = -4000 m + 400m*(P/A, 8%,10)
= -4000 m + 400m*6.710081
= -1315.97 m
As NPW is negative, it is not worth it
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Econ Public Finance, please help!
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