A
company has been invited to invest $4 millions in partnerships and
recieve a guaranteed total amount of $10 million after 6 years. By
the corperate policy the NARR is always at 2% above the cost of
capital. The inflation rate during the 6 years is expected to
average 4% per year. If the real interest rate paid on capital is
12% per year, is this investment economically justified?

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