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A 10-year project is evaluated under two scenarios: (i) with inflation, and (ii) without inflation. Without inflation under 10% interest rate its present worth is $21,851. If annual inflation of 2% is assumed, then the project's present worth becomes 24% lower. It is also known that the project has first cost, no operating costs, the depreciation rate of 12%, and it brings annual revenue. What is the project's first cost?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91838552

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