Question
You have been offered a unique investment opportunity. If you invest $20,000 today, you will receive $1,000 one year from now, $3,000 two years from
You have been offered a unique investment opportunity. If you invest $20,000 today, you will receive $1,000 one year from now, $3,000 two years from now, and $20,000 ten years from now.
a. What is the NPV of the investment opportunity if the interest rate is 8% per year? Should you take the opportunity?
b. What is the NPV of the investment opportunity if the interest rate is 4% per year? Should you take the opportunity?
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The Handbook For Investment Committee Members
Authors: Russell L. Olson
1st Edition
0471719781, 978-0471719786
