18

You are considering investing in a start up company. The founder asked you for $300,000 today and you expect to get $1,080,000 in 9 years. Given the riskiness of the investment opportunity, your cost of capital is 28%. What is the NPV of the investment opportunity? Should ou undertake the investment opportunity? Calculate the l and use it to determine the maximum dev ation allowable in the cost o capital estimate to leave the decision unchanged. What is the NPV of the investment opportunity? The NPV of the investment is (Round to the nearest dollar.) Should you undertake the investment opportunity? Since the NPV is Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged The IRR is %. (Round to two decimal places.) Vyou should the deal Select from the drop-down menus.) The maximum deviation allowable in the cost of capital is% (Round to two decimal places.)