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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 2 years ago
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