Question
Your brother wants to borrow $10,000 from you. He has offered to pay you back $13,250 in a year. If the cost of capital of
Your brother wants to borrow
$10,000
from you. He has offered to pay you back
$13,250
in a year. If the cost of capital of this investment opportunity is
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%,
what is its NPV? The NPV of the investment is
$enter your response here.
(Round to the nearest cent.)
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrod Harford, David Stangeland, Andras Marosi
3rd Canadian Edition
0135418178, 978-0135418178
