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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
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.
A.) 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) |
(Please show Excel NPV Formula)
b. 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) |
(Please Show Excel NPV Formula)
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