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Use several alternative discount rate values (1% to 10%) to investigate the sensitivity of the present value of net benefits of the dam in exercise (1) to the assumed value of the real discount rate. Determine the "breakeven" value of the discount rate, which can be found by solving for the rate at which the present value of the stream of expected annual net benefits just equals the cost of construction.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91373272

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