2.3-2.4 (Excel): You have been offered a unique investment opportunity. If you invest $1 million at t=0, you will receive $20,000 from t=1 to t=40, plus a balloon payment of $1.5 million at t=40. 2.3 What is the NPV of the investment, assume your expected rate of return in the investment is 5%?- 2.4 What is the internal rate of return of the investment?
2.3-2.4 (Excel): You have been offered a unique investment opportunity. If you invest $1 million at t=0, you will receive $20,000 from t=1 to t=40, plus a balloon payment of $1.5 million at t=40. 2.3 What is the NPV of the investment, assume your expected rate of return in the investment is 5%?- 2.4 What is the internal rate of return of the investment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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- Note that some problems cannot be easily calculated by using calculator. Such questions are marked with “Excel”. For such questions You can write down the proper excel formula as the answer. You may need to use formulas such PV, FV, RATE, PMT and NPER. When you need to use these formulas, you need to follow the same manner of expression as we did in the classroom: for example, PV (rate= …, nper=…, pmt=…, FV=…).
Transcribed Image Text:2.3-2.4 (Excel): You have been offered a unique investment opportunity. If you
invest $1 million at t=0, you will receive $20,000 from t=1 to t=40, plus a balloon
payment of $1.5 million at t=40.<
2.3 What is the NPV of the investment, assume your expected rate of return in the
investment is 5%?
2.4 What is the internal rate of return of the investment?<
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