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A project requires initial investment of $300,000 at the present time. There are two possible outcomes for this project:

• Success: The annual revenue of $50,000 for 8 years and the salvage value of $150,000 at the end.

• Failure: Zero annual revenue and the salvage value of 200,000 at the end of year 2.

Find the minimum success probability to make this project economically satisfactory.

Assume 12% minimum interest rate of return.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92398368

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