Investment Decisions
(1) Summarize three key points from the chapter, in one paragraph for each point. Begin your response with an introductory sentence, which identifies the key point or topic that you are going to explain. Explain the topic concisely, in a fashion that would clearly and fully describe the concept to a student in economics.
(2) Suppose an initial investment of $100 will return $50/year for three years (assume the $50 is received each year at the end of the year). Is this a profitable investment if the discount rate is 20%?
(3) Describe an investment decision your company has made. Compute the opportunity costs and benefits of the decision. Did your company make the right decision? If not, what would you do differently? Compute the NPV of the investment.