Question
You have been offered a unique investment opportunity. If you invest $9,800 today, you will receive $490 one year from now, $1,470 two years from
You have been offered a unique investment opportunity. If you invest $9,800 today, you will receive $490 one year from now, $1,470 two years from now, and $9,800 ten years from now.
a. What is the NPV of the opportunity if the cost of capital is 6.9% per year? Should you take the opportunity?
b. What is the NPV of the opportunity if the cost of capital is 2.9% per year? Should you take it now?
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
8th Edition
0324259700, 978-0324259704
