Question
Your company is offered a project that will yield $150,000 in two years. The project requires an investment of $130,000 now. You could otherwise save
Your company is offered a project that will yield $150,000 in two years. The project requires an investment of $130,000 now. You could otherwise save those funds to earn an interest rate of 7.5%
a. If you saved your funds, how much money would you have after two years?
b. If you wanted $150,000 in the bank after two years, how much would you have to invest today?
c. What is the net benefit of the project in two years? Should your company undertake the project?
d. What is the net benefit of the project today? Should your company undertake the project?
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