Problem:
Suppose that you are approached with an offer to purchase an investment that will provide cash flows of $1,200 per year for 15 years. The cost of purchasing this investment is $9,800. You have an alternative investment opportunity, of equal risk, that will yield 8% per year.
Required:
Question 1: What is the NPV that makes you indifferent between the two options?
Note: Please provide full description.