What is the net present value of paying the points

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Reference no: EM132036980

1. A project has an initial outlay of $2,038. It has a single payoff at the end of year 9 of $7,559. What is the net present value (NPV) of the project if the company’s cost of capital is 10.19 percent? Round the answer to two decimal places.

2. A homeowner can obtain on property valued at $250,000, a 30-year fixed-rate mortgage, LTV=90%, at a rate of 6.0 percent with zero points or at a rate of 5.5 percent with 2.25 points. If she will keep the mortgage for 30 years, what is the net present value of paying the points (to the nearest dollar)?

Reference no: EM132036980

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