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Having trouble with this one! 36. Your good friend, Insolvencia, is asking you to invest $5,425 in her threeyear project. The beforetax cash ow is

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Having trouble with this one!

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36. Your good friend, Insolvencia, is asking you to invest $5,425 in her threeyear project. The beforetax cash ow is Cash ow $4,000 $6,000 $2,500 End of year 1 2 3 You'd be taxed at 45 per cent, and your opportunity cost is 4 per cent per year, compunded quarterly. By how much will your wealth change if you invest? A. 5 $702.72 B. 5 $322.33 C. 5 $941.94 D. 5 $1,061.55 E. > $1,061.55 The present value of the aftertax cash ow is $6,381.89, so an investment of $5,425 will leave you $957 richer

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