Your brother wants to borrow 10000 from you he has offered


Question: Your brother wants to borrow 10000 from you. He has offered to pay you back $12750 in a year. If the cost of capital of this investment opportunity is 9% what is its NPV? Should you undertake the investment opportunity? calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

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Finance Basics: Your brother wants to borrow 10000 from you he has offered
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