Question
Your brother wants to borrow $10,500 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of
Your brother wants to borrow $10,500 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10% what is the NPV? 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.
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
13th edition
978-0133428537
