You have been offered a unique investment opportunity if


Question: You have been offered a unique investment opportunity. If you invest $11,500 today, you will receive $575 one year from now, $1,725 two years from now, and $11,500 ten years from now.

A. What is the NPV of the opportunity if the cost of capital is 6.9% per year? Should you take the opportunity?

B. What is the NPV of the opportunity if the cost of capital is 2.9% per year? Should you take it now?

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Finance Basics: You have been offered a unique investment opportunity if
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