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14.28Consider a project that costs $1 million today but yields no returns for several years. Once the project
14.28 Consider a project that costs $1 million today but yields no returns for several years. Once the project
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becomes productive, it yields $250,000 annually forever. Suppose two firms are examining this project, a Japanese firm with a cost of capital of 7% and a U.S. firm with a cost of capital of 13%. Approximately how many more years than the U.S. firm would the Japanese firm be willing to wait until the project starts generating cash?
a) 14 years
b) 5 years
c) 24 years
d) 3 years
Can you tell me how to you get the correct answer
