Question
1)You are offered an investment with returns of $ 2,040 in year 1, $ 3,931 in year 2, and $ 4,839 in year 3. The
1)You are offered an investment with returns of $ 2,040 in year 1, $ 3,931 in year 2, and $ 4,839 in year 3. The investment will cost you $ 8,683 today. If the appropriate Cost of Capital (quoted interest rate) is 8.3 %, what is the Net Present Value of the investment? Enter your answer to the nearest $.01.
2)You are offered an investment with returns of $ 2,001 in year 1, $ 4,677 in year 2, and $ 5,749 in year 3. The investment will cost you $ 8,867 today. If the appropriate Cost of Capital (quoted interest rate) is 13.0 %, what is the Net present Value of the investment? Enter your answer to the nearest $.01.
Please help, I am confused. thank you
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