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QUESTION
Assume you own a factory and you could get a loan for $80'000 to expand the factory.
Assume you own a factory and you could get a loan for $80'000 to expand the factory. Expanding the factory produces an additional $25'000 worth of output for 4 years (4 payments, the first one after one year).
a. If the interest rate is 10% should you do the investment?
