You have been offered a unique investment opportunity. If you invest

$11,800

today, you will receive

$590

one year from now,

$1,770

two years from now, and

$11,800

ten years from now.

a. What is the NPV of the opportunity if the cost of capital is

6.2%

per year? Should you take the opportunity?

b. What is the NPV of the opportunity if the cost of capital is

2.2%

per year? Should you take it now?

a. What is the NPV of the opportunity if the cost of capital is

6.2%

per year?

If

the cost of capital is

6.2%

per year, the NPV is

$