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 a proposed project.
Up-front cost: $100,000
Next year's revenue: $15,000
Real interest rate: 7%
Depreciation rate: 3%
How much profit does the project yield, and should your client invest in the project?
A)No, the client should not invest because the project yields a $15,000 loss.
B)Yes, the client should invest because the project yields a $15,000 profit.
C)No, the client should not invest because the project yields a $10,000 loss.
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 a proposed project.
Up-front cost: $100,000
Next year's revenue: $15,000
Real interest rate: 7%
Depreciation rate: 3%
How much profit does the project yield, and should your client invest in the project?
A)No, the client should not invest because the project yields a $15,000 loss.
B)Yes, the client should invest because the project yields a $15,000 profit.
C)No, the client should not invest because the project yields a $10,000 loss.
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