Question
Your brother wants to borrow $ 10 comma 750$10,750 from you. He has offered to pay you back $ 13 comma 250$13,250 in a year.
Your brother wants to borrow
$ 10 comma 750$10,750
from you. He has offered to pay you back
$ 13 comma 250$13,250
in a year. If the cost of capital of this investment opportunity is
12 %12%,
what is itsNPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.
If the cost of capital of this investment opportunity is
12 %12%, what is its NPV?
The NPV of the investment is $?
Should you undertake the investment opportunity?
Since the NPV is positive/negative? you should take/not take the deal?
Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.
The IRR is %?
The maximum deviation allowable in the cost of capital is %?
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