Answered step by step
Verified Expert Solution
Question
1 Approved Answer
5. An investment requires 23,000 today, and produces the first cash flow of 1700 in two years (year 2). Cash flow is expected to grow
5. An investment requires 23,000 today, and produces the first cash flow of 1700 in two years (year 2). Cash flow is expected to grow at 3% a year after year 2. | ||||||
a) What is the NPV of this investment if the discount rate is 9% ? | ||||||
NPV = $2,898.27 | ||||||
b) What is the rate of return of this investment? | ||||||
Rate of return = 9.72% This is all the information I have, I got above answers. |
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started