A project costs 5,000 today and provides secure income for 400 years from next year,...
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Finance
A project costs 5,000 today and provides secure income for 400 years from next year, but it is uncertain how long the project will continue to generate income. The risk-free interest rate is 4 percent. How many years must the project at least continue to provide these revenues for the net present value to be positive?
b)
Assume that you have a portfolio consisting of half share A and half share B, where both share A and share B have a variance equal to 4 and that the shares are uncorrelated (ie correlation coefficient equal to 0). What is the variance of the portfolio?
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