_____2. If ABC Corporation invests $10,000 to purchase an asset with a net present value (NPV) of $3,000, which of the following would you expect to occur?

1. The value of the corporation would rise by $10,000, the cost of the investment.
2. The value of the corporation would rise by $10,000, the cost of the investment, but the value of the common stock would rise by only $3,000, the NPV of the investment.
3. The values of both the corporation and its common stock would fall by $7,000, since the investment costs $10,000 but is only worth $3,000. Making this investment would destroy value of $3,000.
4. The values of both the corporation and its common stock would rise by $3,000, the NPV of the investment.
5. This is all very confusing. May I be excused?