You have an opportunity to invest $102,000 now in return for $79,100 in one year and $30,200 in two years. If your cost of capital is 9.2%, what is the NPV of this investment? The NPV will be $ (Round to the nearest cent.)

You have an opportunity to invest $102,000 now in return for $79,100 in one year and $30,200 in two years. If your cost of capital is 9.2%, what is the NPV of this investment? The NPV will be $ (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

See similar textbooks

Related questions

Q: ,what is the NPV of this investment?

A: Net Present Value: It is a measure of profitability and shows the absolute profit or loss made from…

Q: You have a goal of having $250,000 five years from today. The return on the investment is expected…

A: We need to use present value formula to calculate the amount needed to invest today( PV).Amount…

Q: ou are considering an investment opportunity that yields $520 one year from today, $900 in two…

A: PV = sum of (Cashflow/(1+r)^1 +.......Cashflow/(1+r)^n)

Q: The FW of the Alternative 1 is $ (Round to the nearest dollar.) The FW of the Alternative 2 is S.…

A: Future Worth: It is the future value of the annual cash flows of the project. These cash flows…

Q: The project has a payback period of 3.25 years. If the company's discount rate is 8% find the…

A: Payback period is the period required to recover initial investment and do not consider cash flow…

Q: every year for 4 years required Return is 15% the required. Payback is 3 years. Please use formula.…

A: In order to make capital budgeting decision considered different area of financial decision and…

Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…

A: Step 1:

Q: What is the most you would be willing to pay for an investment that will pay you $537 in one year,…

Q: You have an opportunity to invest $107,000 now in return for $79,700 in one year and $29,800 in two…

Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…

A: Given: Cost of capital 6.60% Growth rate 2.30% Year Particulars Investment A…

Q: You currently have $8,700 to invest. You can invest the full amount now for a period of 9 years at…

A: Final Value after 9 years = $15,000Initial Value = $8,700Number of years (n) = 9

Q: Invest $12,000 today and $10,000 in four years. Receive $15,000 in six years and $20,000 in eleven…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: What is the value of an investment opportunity that will pay GH¢5,060 next year, GH¢5,500 the year…

A: Present value is a current value of future cash flow at specified rate of interest. It helps in…

Q: Harry Dukee has been presented with an investment opportunity which will yield end of year cash…

A: Capital budgeting is a tool for the decision-making of the project, With the help of the concept of…

Q: Question: A project pays $2000 today, costs $5000 a year from now, and pays $12, 500 in two years.…

A: Here, Cash inflow in year 0 is $2,000 Cash Outflow in Year 1 is $5,000 Cash Inflow in Year 2 is…

Q: You have an opportunity to invest $50,400 now in return for $60,100 in one year. If your cost of…

A: Net Present value equal to present value of cash flow minus initial investment

Q: Suppose you're presented with a proposal for a project that costs $4,300 and will bring in $20,200…

A: Net present value is the most important method of capital budgeting based on time value of money and…

Q: You have been offered a unique investment opportunity. If you invest $8,800 today, you will receive…

A: Net Present Value is the present value of cash inflows less the initial investment. If NPV is…

Q: You have an opportunity to invest $100,000 now in return for $79,600 in one year and $30,300 in two…

A: Given: Year Particulars Amount 0 Initial investment -$100,000 1 Cash inflows $79,600 2 Cash…

Q: The initial cost of an investment is $60,000 and the discount rate (cost of capital) is 8%. The…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: You have been offered a unique investment opportunity. If you invest $11,600 today, you will…

A: The computation is shown in excel table below: The formula used above is shown below: Working…

Q: You have an opportunity to invest $100,000 now in return for $80,000 in one year and $30,000 in two…

A: NPV : It is defined as the sum of the present values of all future cash inflows less the sum of the…

Q: You have an opportunity to invest $49,200 now in return for $60,900 in one year. If your cost of…

A: Net Present Value(NPV) is one of the modern techniques of capital budgeting which considers the time…

Q: You have an opportunity to invest $50,100 now in return for $59,800 in one year. If your cost of…

A: Amount Invested now is $50,100 Amount returned in one year is $59,800 Cost of capital is 8.2% To…

Q: Suppose you have an investment offer that guarantees an average investment gain of $1,000 per year.…

A: The average rate of change describes the rate at which one quantity changes in relation to another.…

Q: 6,986 today and it will generate $9,412 in a year. You would have extra idle fund of $2,935 after…

A: Net present value is the difference between the present value of cash minus the initial investment…

Q: Suppose you buy a machine and you have the option of paying the full price, $40,000, now; or $10,000…

A: Here, Option -1 is paying $40,000 now Option -2 is Paying 10,000 each at the each of the next five…

Q: You have been offered a unique investment opportunity. If you invest $9,500 today, you will receive…

A: Given: Initial investment = $9,500 Cash in flow in year 1 = $475 Cash in flow in year 2 = $1,425…

Q: You have been offered a unique investment opportunity. If you invest $8,300 today, you will receive…

A: Net present value (NPV) is the difference between present value of all cash inflows and initial…

Q: t=1/2 you have $1300

A: Initial investment at t=0: $1000Additional investment at t=1/2: $5000Account balance at t=1/2:…

Q: ou are trying to value the following investment opportunity: The investment will cost you $5663…

A: NPV of the perpetuity is determined when there is a constant growth in future cash flow for the…

Q: comma 900 in one year. If your cost of capital is 7.6 %, what is the NPV of this investment?

A: The net present value calculation aids in determining whether an investment will yield a higher…

Q: If you insulate your office for $16000 you will save 1600 a year in heating exp. these savings will…

A: The provided information are: Initial Investment = $16000 Saving = $1600

Q: You have been offered a unique investment opportunity. If you invest $10,400 today, you will receive…

A: NPV = Present value of future cash inflows - Initial investment Calculation of present value of…

Q: You have an investment opportunity that promises to pay you $16,000 in four years. Suppose the…

A: In the context of the time value of money (TVM), interest rates play a critical role. The time value…

Q: You have an opportunity to invest $106,000 now in return for $79,300 in one year and $29,100 in…

A: Data given: Initial Investment ($) = 106,000 Cash flow(Year 1) = $ 79300 Cash flow (Year 2) = $…

Q: If you invest $5,000 today, you will receive $1,000 in a year, $1,500 each in year 2 and year 3, and…

A: Calculate the net present value as follows:

Q: are deciding between two mutually exclusive investment opportunities. Both require the same initial…

A: IRR and NPV are two popular methods of capital budgeting analysis and choosing the best project.

Q: You have an opportunity to invest $100,000 now in return for $80,000 in one year and $30,000 in two…

A: Explanation :NPV is a Capital budgeting techniques. It is defined as the sum of the present values…

Q: If a particular investment will pay $500, 5 months from now, and an additional $500, 9 months from…

A: Present value of future amount is computed as follows:-PV= wherePV= present valueFV = future valuer=…

Q: What is the NPV of a project that COSTS $0.5M today and cash inflows $5,000 monthly, paid annually,…

A: Initial Cost = i = $500,000Monthly Cash Flow = cf = 5000 * 12 = $Time = t = 10 Cost of Capital = r =…

Q: What does the IRR rule say about whether the investment should be undertaken? What about the NPV…

A: Capital budgeting is a fundamental financial procedure in which organizations evaluate and select…

Q: A firm is considering three possible one-year investments, which we will name X, Y, and Z. ∙…

A: Given information: Purchase cost of brand new car is $35,000 Sale value after 9 years is $9,000

Q: ou are considering an investment that will pay you $3,000 a year for 33 years, starting today.…

A: Annuity refers to a stream of fixed and periodic cash flows. Here the annual amount of $3000 for 33…

Q: You are considering a safe investment opportunity that requires a $1,450 investment today, and will…

A: IRR is the break even rate of return at which net present value is zero and cost of capital is the…

Question

You have an opportunity to invest $102,000 now in return for $79,100 in one year and $30,200 in two years. If your cost of capital is 9.2%, what is the NPV of this investment?
The NPV will be $
(Round to the nearest cent.)

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.

Unlock instant AI solutions

Tap the button
to generate a solution

Click the button to generate
a solution

SEE SOLUTION

Similar questions

You have an opportunity to invest $106 000 now in return for S00,100 in one yoar and $30 400 in two years If your cost of capital is 8 9% what is the NPV of this investment? The NPV will be S (Round tó the nearest cent)
You are considering an investment with the following characteristics. The investment will cost you $551 today, but will pay you annual benefits of $107 for 11 years starting at the end of the first year. The relevant opportunity cost of capital is 9%. What is the NPV of this investment? Round your answer to two decimals. Enter negative values with a - sign. Don't enter the $-symbol as part of your answer.
Please compute this manually and make sure it is easy to read and understand. Harry Dukee has been presented with an investment opportunity which will yield end of year cash flows of P30,000 per year in years 1 through 4; P35,000 per year in years 5 through 9; and P40,000 in year 10. This investment will have a cost of P250,000 today and the cost of capital is 10%. What is the Net Present Value?
An example of how to calculate net present value is done using the following. Imagine you have been given an investment opportunity wherein if you invest $1,200 today, you will receive $650 dollars at the end of each year for the next 5 years. You could separately choose to invest your money at 10% interest each year. Should you take the investment opportunity? To find the answer, use the NPV formula:
How much time will it take you to accumulate $500,000, assuming you invest $15,000 today and $150/ month, and can earn a monthly return of 1%? Next, How would this answer change if there was no upfront investment?
Please show detailed steps and correct.
You are going to invest $5405 in 3 years and $7923 in 6 years. If you expect to earn a return of 8.26%, how much will you have in 10 years? Answer:
K You have been offered a unique investment opportunity. If you invest $11,300 today, you will receive $565 one year from now, $1,695 two years from now, and $11,300 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 5.7% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.7% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5,7% per year? If the cost of capital is 5.7% per year, the NPV is $. (Round to the nearest cent.)
Suppose you have an investment worth $800 and you want it to increase in value by 400%. a) What is the desired future value of the investment? For full marks your answer(s) should be rounded to the nearest dollar. FV = $ 0.00 b) How long will it take the investment to reach the desired future value, if it earns 5.50% compounded semi-annually? Your an be rounded up to the nearest month. Time = 0 years 0 months
If you invest $73,300 in a project which yields an annual return of $13,500, how many years will it take to recover your investment if the annual interest rate is 4.5%? a 7 b 9 c. 5 d 8 e. 6
You are considering the following two mutually exclusive investment opportunities. If your cost of capital is 13%, which is better. Explain your reasoning and support numerically. Capital is not rationed. Opportunity A would cost $1000 and return $400 per year for 4 years. Opportunity B would cost $2200 and would return $1000 per year for 3 years.
You are considering the purchase of real estate that will provide perpetual income that should average $54,000 per year. How much will you pay for the property if you believe its market risk is the same as the market portfolio’s? The T-bill rate is 6%, and the expected market return is 9.0%. Property Value =

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS