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What is the lowest rate of return the entrepreneur

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Reference no: EM13891828

An entrepreneur wants to purchase a particular small business. The asking price is $5 million. He expects to improve the business's oper- ations over a period of five years and sell it at a handsome profit. To help him achieve this goal, a wealthy aunt is willing to loan the entre- preneur $5 million for five years at zero percent interest. Given this loan, what is the lowest rate of return the entrepreneur should be will- ing to accept on purchase of the business? Why?

Reference no: EM13891828

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