You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive $500 one year from now, $1,500 two years from now, and $10,000 ten years from now.
What is the NPV of the opportunity if the cost of capital is 6% per year? Should you take the opportunity?
What is the NPV of the opportunity if the cost of capital is 2% per year? Should you take it now?
Initial investment	$ 10,000
Cash flow year 1	$ 500
Cash flow year 2	$ 1,500
Cash flow year 10	$ 10,000
What is the NPV of the opportunity if the cost of capital is 6% per year? Should you take the opportunity?
Cost of capital	6%
NPV
Take opportunity (Yes/No)
What is the NPV of the opportunity if the cost of capital is 2% per year? Should you take it now?
Cost of capital	2%
NPV
Take opportunity (Yes/No)