You are considering investing in a start up company. The founder asked you for $$200,000$ today and you expect to get

$$1,060,000$ in $10$ years. Given the riskiness of the investment opportunity, your cost of capital is $27\%.$ What is the NPV

of the investment opportunity? Should you undertake the investment opportunity? Calculate the IRR and use it to

determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

If the cost of capital is $27\%,$ the NPV of the investment is $$.($Round to the nearest cent.$)$

Since the NPV is you should the deal! $($Select from the drop$-$down menus.$)$

The IRR is $\%.($Round to two decimal places.$)$

The maximum deviation allowable in the cost of capital is $\%.($Round to two decimal places.$)$You are considering opening a new plant. The plant will cost $$103\mathrm{.}2$ million upfront. After that, it is expected to produce

profits of $$30\mathrm{.}9$ million at the end of every year. The cash flows are expected to last forever. Calculate the NPV of this

investment opportunity if your cost of capital is $8\mathrm{.}6\%.$ Should you make the investment? Calculate the IRR and use it

to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

If your cost of capital is $8\mathrm{.}6\%,$ the NPV of this investment opportunity is $ million. $($Round to one decimal place.$)$

Should you make the investment? $($Select the best choice below.$)$

A$.$ Yes, because the project will generate cash flows forever.

B$.$ No$,$ because the NPV is not greater than the initial costs.

C$.$ Yes, because the NPV is positive.

D$.$ No$,$ because the NPV is less than zero.

The IRR of the investment is $\%.($Round to two decimal places.$)$

The maximum deviation allowable in the cost of capital is $\%.($Round to two decimal places.$)$