Problem
1. Would you put £40,000 into a project which pays back nothing in the first year but then brings annual net returns of £12,000 from the end of year 2 until the end of year 6, assuming an interest rate of 8%?
2. A project requires an initial outlay of £20,000 and will pay back the following returns (in £):
1,000 at the end of years 1 and 2
2,000 at the end of years 3 and 4
5,000 at the end of years 5, 6, 7, 8, 9 and 10
Is this project a worthwhile investment if the going rate of interest is (a) 9%, (b) 10%?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.