Problem 6.46 – Profitability and Break-Even Interest Calculation for an Asset Sale

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Difficulty – Medium

Determine if a firm will make a profit on an asset that costs $104,600 to produce today and has a contract to be sold for $175,000 in four years. The discount rate is 11% per year. Calculate the break-even interest rate. (Your numbers will vary).

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