You've graduated from college and are now working in an investment firm where you advise clients on investment decisions. Here is the information on the proposed project.
Up-front cost: $250,000
Next year's revenue: $25,000
Real interest rate: 4%
Depreciation rate: 6%
How much profit does the project yield, and should your client invest in the project?
A)Yes, the client should invest because the project yields a $25,000 profit.
B)No, the client should not invest because the project yields a $25,000 loss.
C)The client is indifferent because the project does not yield any profit above the up-front cost.
D)Yes, the client should invest because the project yields a $50,000 profit.

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The Answer of You've graduated from college and are now working in an investment firm where you advise clients on investment decisions. Here is the information on the proposed project.
Up-front cost: $250,000
Next year's revenue: $25,000
Real interest rate: 4%
Depreciation rate: 6%
How much profit does the project yield, and should your client invest in the project?
A)Yes, the client should invest because the project yields a $25,000 profit.
B)No, the client should not invest because the project yields a $25,000 loss.
C)The client is indifferent because the project does not yield any profit above the up-front cost.
D)Yes, the client should invest because the project yields a $50,000 profit.

You've Graduated from College and Are Now Working in an Investment