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The NPV, nonetheless, won't consider the depreciation as it is the price of capital. On the other hand, this is an element on the prolonged-phrase administration rate, which also involves the upkeep fee and also the depreciation element.
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e. CAGR (compound regular expansion return). A funds Trader is actually keen on the net return attained 12 months just after yr, my latest blog post Consequently usage of geometric is a lot more proper. That's why we might use geometric average for chance free charge and threat top quality for every on the three divisions, as supplied in exhibit five in the case.