ulie wants to borrow $10,250 from you. She has offered to pay you back $12,250 in a year. If the cost of capital of this investment opportunity is 12%, what is its NPV? Question content area bottom Part 1 The NPV of the investment is $enter your response here. (Round to the nearest cent.)
ulie wants to borrow $10,250 from you. She has offered to pay you back $12,250 in a year. If the cost of capital of this investment opportunity is 12%, what is its NPV? Question content area bottom Part 1 The NPV of the investment is $enter your response here. (Round to the nearest cent.)
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
Related questions
Question
Julie wants to borrow
$10,250
from you. She has offered to pay you back
$12,250
in a year. If the cost of capital of this investment opportunity is
12%,
what is its NPV?Question content area bottom
Part 1
The NPV of the investment is
$enter your response here.
(Round to the nearest cent.)Expert Solution
Step 1: Define of NPV
NPV is also known as Net Present value. It is a capital budgeting technique which helps in decision making on the basis of future cash inflow & outflow from the project. If the project provide the positive Npv than project should be accepted and vice versa.
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