Investment opportunity-net present value of investment

Assignment Help Financial Management

Reference no: EM131558936

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.

Reference no: EM131558936

Questions Cloud

The company has cumulative voting rule : the company has a majority voting rule? the company has a cumulative voting rule?

How could they possibly meet the southern demands : How could they possibly meet the southern demands for protecting the institution of slavery with the northern demands for abolishing it?

All operating cash receipts-operating cash expenditures : All operating cash receipts, operating cash expenditures, and applicable tax payments and credits are assumed to occur at the end of the year.

Estimate what it will cost to buy a replacement tank : Your 1st day on the job you have broken a hundred gallon metal tank while taking it off of the delivery truck.

Investment opportunity-net present value of investment : Consider the following investment opportunity. What is the Net Present Value (NPV) of this investment if the opportunity cost of capital is 6% anual?

Explains the types of developmental changes : Fourteen-year-old Jake is about to enter high school. Using the stages of Piaget, Erikson, and Kohlberg, explains the types of developmental changes

Find the optimal capacity : A production facility experiences 1000 units of demand increase per year for a foreseeable future. The management has an option to either add a machine.

Discuss the pros and cons of the secure fence act : Discuss the pros and cons of the Secure Fence Act of 2006. What problems might be caused by the construction of physical barriers between the US and and Mexico?

How does culture influence work attributes : How does culture influence work attributes? Is it a factor that should be considered in assessment? Justify your answer

User Account

All Pages