Invest in the project

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Suppose you are considering investing in a project that o↵ers the following stream of cash in the following four years: At the end of year one $1, 500 (F V1 = 1, 500), at the end of year two $2,000 (FV2 = 2,000), at the end of year three $2,500 (FV3 = 2,500); and at the end of year four $3,000 (FV4 = 3,000). Assume that your opportunity cost, or discount rate, is i = 5%. Find the present value and explain whether or not you would invest in the project, if you are asked to pay $5, 500 to be able to participate.

Reference no: EM131966629

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