You have been offered the following investment opportunity

Assignment Help Corporate Finance

Reference no: EM13380990

You have been offered the following investment opportunity: if you invest $16,000 today, you will receive $4,000 two years from now, $7,000 four years from now, and $9,000 six years from now.

a) What is the NPV of the opportunity if the interest rate is 6% per year? Should you take this opportunity?

b) What is the NPV of the opportunity if the interest rate is 2% per year? Should you take this opportunity?

Reference no: EM13380990

Questions Cloud

In addition to your regular job for the last three years : in addition to your regular job for the last three years you have operated your own business as a crocodile wrestler

Project y is estimated to cost 9000000 to start and will : project y is estimated to cost 9000000 to start and will generate 2800000 pre-tax income annually for 5 years with the

Problem 1a firm just paid a dividend of 2 and the growth : problem 1a firm just paid a dividend of 2 and the growth rates are forecasted to be 3 in the first period and then 2

Consider a 6-year coupon bond with 4 annual coupons and a : consider a 6-year coupon bond with 4 annual coupons and a 1000 face value. how much will the price of the bond change

You have been offered the following investment opportunity : you have been offered the following investment opportunity if you invest 16000 today you will receive 4000 two years

1 pointy fork inc expects sales next year to be 350000 if : 1. pointy fork inc. expects sales next year to be 350000 if the economy is strong 250000 if the economy is steady and

Reworked inc makes winter hats out of recycled clothing : reworked inc. makes winter hats out of recycled clothing that are very popular in the fall-winter season.nbsp units

Pringle sock company determines its break-even point : pringle sock company determines its break-even point strictly on the basis of cash expenditures related to fixed

1 elizabeth bicycle company makes bicyclesnbsp the firms : 1. elizabeth bicycle company makes bicycles.nbsp the firms income statement is as followselizabeth bicycle

Reviews

Write a Review

Required(*) Message

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

User Account

All Pages