Question
1. You are preparing to produce some goods for sale. You will sell them in one year and you will incur costs of$80,000 immediately. If
1. You are preparing to produce some goods for sale. You will sell them in one year and you will incur costs of$80,000 immediately. If your cost of capital is 7.1%,what is the minimum dollar amount you need to sell the goods for in order for this to be a non-negative NPV?The minimum dollar amount is?(Round to the nearest dollar.)
2. Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $5,840 at the end of each of the next 3years. The opportunity requires an initial investment of $1,460 plus an additional investment at the end of the second year of$7,300.What is the NPV of this opportunity if the interest rate is 2.5% per year? Should Marian take it?
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