What is the maximum you would pay for the investment

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Reference no: EM131210019

Assignment - TVM- T/Th class

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1) You are considering an investment that will pay you $12,000 the first year, $13,000 the second year, $17,000 the third year, $19,000 the fourth year, $23,000 the fifth year, and $28,000 the sixth year (all payments are at the end of each year).

a. What is the maximum you would pay for this investment if your opportunity cost is 12%?

b. If you are offered that same investment for $70,000 today, what rate of return would you be earning?

Reference no: EM131210019

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