Corporate Finance

You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive $500 ome year from now. $1,500 two years from now, and $10.0010 ten years from now. Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel fimction is to be used, the directions will specifi the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted helow. In all cases, unless otherwise directed, use the emrliest appearance of the data in your formulos, usually the (riven Dato section. a. What is the NPV of the opportunity if the cost of capital is 6% pret ycar? Should you take the opportunity? What is the NPV of the opportunity if the cost of capital is 2% per year? Should you take it now? b. Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 10 S S S S 10,000 500 1,500 10,000 1. What is the NPV of the opportunity if the cost of capital is 6% pret ycar? Should you take the opportunity? Cost of capital NPV Take opportunity (Yes/No) b. What is the NPV of the opportunity if the cost of capital is 2% per year? Should you take il now? Cost of capital 29 NPV Take opportumily (Yes/No) 1 2 Requirements In cell D17. by using cell references, write an expression to calculate the NPV of the investment opportunity (1 pt.) In cell D18, type Yes or No depending on whether you would take the opportunity or not (1 pt.). In cell D24. by using cell references, write an expression to calculate the NPV of the investment opportunity (1 pt.) In cell D25, type Yes or No depending on whether you would take the opportunity or not (1 pt.). 3 4