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Suppose a new investment opportunity offers a 14% rate of return. Is this an attractive project to an ongoing firm if the firm can finance the project with 100% debt at an 11% interest rate?

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Suppose a new investment opportunity offers a 14% rate of return. Is this an attractive project to an ongoing firm if the firm can finance the project with 100% debt at an 11% interest rate?

Answered Same Day Dec 25, 2021

Solution

David answered on Dec 25 2021
125 Votes
Suppose a new investment opportunity offers a 14% rate of return. Is this an attractive project to an
ongoing firm if the firm can finance the project with 100% debt at an 11% interest rate?
Answer: Yes definitely it is attractive project because returns on investment is greater then interest on...
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