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Question: Suppose that you are planning to take a year vacation to bike across the United States. Some-one is willing to sell you a new bicycle for $500. At the end of the year, you expect to resell the bicycle for $350. The benefit to you of using the bicycle is the equivalent of $170.

a. What is the internal rate of return?

b. If the discount rate is 5 percent, should you buy the bicycle?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92308586

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