Your grandmother gives you $10,000 to be invested in one of three opportunities: real estate, regular bonds, or zero coupon bonds. If you invest the entire $10,000 in one of these opportunities with the expected cash flows shown below, which investment offers the highest NPV? Assume for simplicity that an 11 percent discount rate is appropriate for all three investments.

(IN EXCEL PLEASE)

Investment Real estate Bond Zero coupon Year 1 Year 2 $1,300 $1,300 1,000 1,000 0 0 Cash Inflows Year 3 $1,300 1,000 0 Year 4 Year 5 $1,300 $9,000 1,000 11,000 0 18,000