Consider the following investment project:
n
A
i
n
0
-$42,000
10%
1
32,400
11
2
33,400
13
3
32,500
12
4
32,500
12
5
33,000
10
Suppose the company's reinvestment opportunities change over the life of the
project as shown in the preceding table (i.e., the firm's MARR changes over the
life of the project). For example, the company can invest funds available now at
10% for the first year, 11% for the second year, and so forth. Calculate the net
present worth of this investment and determine the acceptability of the investment.
