Question
An investment opportunity requires an immediate cash outlay of $45,000, and then an $80,000 cash outlay two years from now. Net returns of $10,000, $30,000,
An investment opportunity requires an immediate cash outlay of $45,000, and then an $80,000 cash outlay two years from now. Net returns of $10,000, $30,000, and $125,000 are expected at the end of each of the next three years, respectively.
What is the investment's net present value if the cost of capital is 12%?
A. $13,041.41
B. $16,093.33
C. -$10,045.63
D. $40,000.00
E. $92,760.80
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
Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
5th edition
321280299, 321280296, 978-0321280299
