Question
You have been offered a unique investment opportunity. If you invest $43,000 today, you will receive $1,500 one year from now, $3,500 two years from
You have been offered a unique investment opportunity. If you invest $43,000 today, you will receive $1,500 one year from now, $3,500 two years from now, and $63,000 ten years from now.
a. What is the NPV of the opportunity if the cost of capital is 5% per year? Should you take the opportunity?
b. What is the NPV of the opportunity if the cost of capital is 4% per year? Should you take it now?
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
14th Edition
978-0273744535, 273744445, 273744534, 978-0273744443
