Question
Your brother wants to borrow $10,500 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 $10,500 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 its NPV? (Round to the nearest cent.)
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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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, William J. Kretlow
11th Edition
0324653506, 978-0324653502
