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You are presented with an investment opportunity with the following cash flows at the end of each period. What is the Net Present Value (NPV)

You are presented with an investment opportunity with the following cash flows at the end of each period. What is the Net Present Value (NPV) of the investment using a 10% discount rate and would a risk-neutral investor undertake such an investment? Comment briefly on whether you think a risk-averse investor would invest.

Investment

Now 10,000

Returns

Year 1 2,500

Year 2 2,500

Year 3 3,000

Year 4 5,000

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