Question

An investment project will require development costs of $120 million at time zero and $80 million at the end of second year from time zero with incomes of $25million per

year at the end of years 1, 2 and 3 and incomes of $60 million per year at the end of years 4through 10 with zero salvage value predicted at the end of year 10. Calculate the rate of return for this project.

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