1) a)You have the opportunity to invest $100,000 now in return for $80,000 in one year and

$30,000 in two years. If your cost of capital is 9% what is the NPV of this

investment?

b)After saving $5000 you are about to buy a car. You notice that a particular dealership is

offering "two-year same as cash" deal. You can take the car home today and pay

nothing until two years from now, when you will owe the dealership the $5,000

purchase price. If your savings account earns 3% per year, what is the NPV of this offer?