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

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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.)

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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:
Please show detailed steps and correct.
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