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

$20,000

today, you will receive

$1,000

one year from now,

$3,000

two years from now, and

$20,000

ten years from now.

a. What is the NPV of the investment opportunity if the interest rate is

6%

per year? Should you take the opportunity?

b. What is the NPV of the investment opportunity if the interest rate is

2%

per year? Should you take the opportunity?