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You are considering investing $775,000 today in return for receiving the following 15 cash flows in the next 15 years (the first cash flow occurs
You are considering investing $775,000 today in return for receiving the following 15 cash flows in the next 15 years (the first cash flow occurs one year from today): [Total 20 Points] - Years 1 through 5: $40,000 - Years 6 through 10: $90,000 - Years 11 through 15: $125,000 a. Calculate the NPV of this investment if the discount rate is 5%. [ 3 points] b. Calculate the IRR of this investment. [3 points] c. Do you invest? [1 point] d. Use the IRR computed in part B above as the discount rate and compute a loan amortization table for the investment. [7 points] e. Assume the discount rate for the first 10 years is 5%, but for the last five years it is 10%. What is the NPV of the investment? [6 points]
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