Consider the following investment opportunity. If you invest $10.000 today, you will receive $500 in a year, $1.500 in two years, and $10.000 in 10 years.
a. What is the Net Present Value (NPV) of this investment if the opportunity cost of capital is 6% anual? Will you accept or reject the investment opportunity?
b. What is the NPV of the investment if the opportunity cost of capital is now 2% anual? Will you accept or reject the investment?
Show your work.