Question
In: Economics
Use four alternative discount rate values to investigate the sensitivity of the present value of net...
Use four alternative discount rate values to investigate the
sensitivity of the
present value of net benefits of the dam in exercise (3) to
the assumed value of the
real discount rate. What is the internal rate of return
(breakeven discount rate)?
What do you conclude? That is, how sensitive is your project
assessment to the
changes of the real discount rate?
Solutions
Expert Solution
| REAL DISCOUNT RATE | PV OF EXPECTED NET BENIFITS |
|---|---|
| .01 | 1575.00 |
| .02 | 575.00 |
| .03 | 241.67 |
| .04 | 75.00 |
Rahul Sunny answered 1 year agoRelated Solutions
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