You have an opportunity to invest $102,000 now in return for $80,300 in one year and $29,400 in two years. If your cost of capital is 8.9%, 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
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You have an opportunity to invest $102,000 now in return for $80,300 in one year and $29,400 in two years. If your cost of capital is 8.9%, what is the NPV of this
investment?
The NPV will be $. (Round to the nearest cent.)
Transcribed Image Text:You have an opportunity to invest $102,000 now in return for $80,300 in one year and $29,400 in two years. If your cost of capital is 8.9%, what is the NPV of this investment? The NPV will be $. (Round to the nearest cent.)
Expert Solution
Step 1

Given Information :

Amount invested = $102,000

Return in first year = $80,300

Return in second year = $29,400

Cost of capital = 8.9%

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