Repayment schedule, You loan your friend $100 subject to

Repayment schedule

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Reference no: EM131328696

You loan your friend $100 subject to the following repayment schedule: $20/months for six months. You stand to profit $20 form the loan. There is also a chance your friend may not make the final payment of $20. Given this information, find the difference between the NPVs depending wherther the final payment occurs. Assume a %5 discount rate. What do the NPV rules tell you?

Reference no: EM131328696

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