Extending credit to customer who ultimately defaults

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Reference no: EM131907322

1. Project L costs $50,000, its expected cash inflows are $14,000 per year for 6 years, and its WACC is 10%. What is the project's NPV?

2. Assuming you purchased shares in the Oakmark Global Select I Fund on May 23, 2014, and based on your answer to question 3, how would you decide if you want to hold or sell your shares?

3. Discuss which is more expensive for a bank: Extending credit to a customer who ultimately defaults, or denying credit to a customer who would have paid the bank back.

Reference no: EM131907322

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