Posted: July 22nd, 2017
Investment Decision
Required
Milton is offering Bernard an opportunity to invest in his deal. He is asking for an equity investment of $125,000 and promises to pay Bernard the following cash flow: Year Cash Flow 1 25,000 2 30,000 3 35,000 4 40,000 5 20,000 Bernard’s hurdle rate is 14%. Does Milton’s proposal meet Bernard’s investment goal?
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