You are evaluating a purchase using the net present value method. Using an interest rate of 3%, find the NPV for this asset. Based on this, should you buy the asset or not? Justify your answer.

You have another possible purchase with an NPV of $5,000. Should you invest in this asset, or the asset in Problem 2? Justify your answer.

Fill in the excel sheet and explain how to get answer:

PROBLEM 2
Inputs
Interest rate
0
1
2
3
4
Outputs
NPV
Invest?
Justification
Which asset?
Justification

0 (112,000) 26,000 1 2 30,000 34,000 3 4 38,000