TOPIC LECTURE: CORPORATE INVESTMENT DECISION Direction: Answer all 1. Why investor needs to consider the opportunity cost of capital in making investment decision. company's liquidation value? Given the following data. Book Value: $ 2 million Salvage Value: $75,000 Liabilities: $750,000 Value of assets at auction: $ 1,500,000 3. Company A purchases a computer for $1,000. The company estimates that the computer's useful life is 4 years. The company also estimates that it would be able to sell the computer at a salvage value of $200 at the end of 4 years. The company follows a straight-line depreciation method. What is the book value of the computer per year? 4. You are considering to invest your $1,500,000 that will pay you back $ 2 million after a year. Is this a good investment when you can get 17 % elsewhere