Question
Susanne invests $9,000 now and again towards the end of year 3. She gets a following return for 6 years. Year 0 1 2 3
Susanne invests $9,000 now and again towards the end of year 3. She gets a following return for 6 years.
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
| Cash Flow | 2,000 | 3,000 | 4,000 | 4,000 | 5,000 | 5,000 |
- Assume Discount rate is7%, answer the following
- What is the Net Present Value of these cash flows? Should Susanne make invest in this opportunity?
- What is the future value of Net Cash Flow (end of year 6)
- If Susanne had another opportunity where her NPV would be $2000. What is her opportunity cost?
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Financial Modeling
Authors: Simon Benninga
2nd Edition
0262024829, 9780262024822
