Consider the following two projects nbspboth have costs of


Consider the following two projects.  both have costs of $5,000 in year 1.  Project 1 provides benefits of $2,000 in each of the first four years only.  The second provides benefits of $2,000 for each of years 6 to 10 only.  Compute the net benefits using a discount rate of 6 percent.  Repeat using a discount rate of 12 percent.  What can you conclude from the exercise

 

 

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Microeconomics: Consider the following two projects nbspboth have costs of
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