The treasurer of a firm has an opportunity to purchase a secured 15% mortgage with 5 years remaining for $10,000. If the firm purchases the mortgage, it will receive five annual payments of $3,000 each. If the treasurer wants no less than a 12% return on ong-term cash investments, the NPV of the mortgage will be (rounded to the nearest dollar)

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
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The treasurer of a firm has an opportunity to purchase a secured 15% mortgage with
5 years remaining for $10,000. If the firm purchases the mortgage, it will receive five
annual payments of $3,000 each. If the treasurer wants no less than a 12% return on
long-term cash investments, the NPV of the mortgage will be (rounded to the nearest
dollar)
Transcribed Image Text:The treasurer of a firm has an opportunity to purchase a secured 15% mortgage with 5 years remaining for $10,000. If the firm purchases the mortgage, it will receive five annual payments of $3,000 each. If the treasurer wants no less than a 12% return on long-term cash investments, the NPV of the mortgage will be (rounded to the nearest dollar)
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