What is the npv of the opportunity

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Q1) You found a house selling for $350,000. You put a down payment for $30,000 and obtain a 25-year fixed-rate mortgage at 6% compounded semiannually. Assume that monthly payments begin in one month, what will each payment be?

Q2) Considering a project with an initial equipment investment of $121,000, in a 30% CCA class. The fixed assets will have a salvage value of $50,397 at the end of the 3-year project. An initial $21,000 investment in net working capital is required and will be fully recovered at the end of year 3. Operating cash flow is expected to be $32,500 per year, in each of the three years. The tax rate is 35% and the required rate of return is 16%. The asset pool continues at the end of the project; hence the PVCCATS method will be used.

What is the NPV?

Should the company accept the project?

Why or why not?

Reference no: EM132740676

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