You have been offered a unique investment opportunity. If you invest $11,800 today, you will receive 1990 one year from now $1,7 a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? Should you take the opportunity? b. What is NPV of the opportunity if the cost of capital is 2.4% per year? Should you take now? a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? If the cost of capital is 6.4% per year, the NPV is $(Round to the nearest cent.) Should you take the opportunity? (Select from the drop-down menu. ke this opportunity b. What is the NPV of the opportunity if the cost of capital is 2.4% per year? If the cost of capital is 2.4% per year, the NPV is $(Round to the nearest cent) Should you take it now? (Select from the drop-down menu.) take this opportunity at the new cost of capital You from now

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Problem 1QTC
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You have been offered a unique investment opportunity. If you invest $11,800 today, you will receive $590 one year from now, $1,770 two years from now, and $11.800 in ten years.
a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? Should you take the opportunity?
b. What is the NPV of the opportunity if the cost of capital is 2.4% per year? Should you take it now?
a. What is the NPV of the opportunity if the cost of capital is 6.4% per year?
If the cost of capital is 6.4% per year, the NPV is $(Round to the nearest cent.)
Should you take the opportunity? (Select from the drop-down menu.)
You
take this opportunity.
b. What is the NPV of the opportunity if the cost of capital is 2.4% per year?
If the cost of capital is 2.4% per year, the NPV is $(Round to the nearest cent.)
Should you take it now? (Select from the drop-down menu.)
You
take this opportunity at the new cost of capital.
Transcribed Image Text:You have been offered a unique investment opportunity. If you invest $11,800 today, you will receive $590 one year from now, $1,770 two years from now, and $11.800 in ten years. a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.4% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? If the cost of capital is 6.4% per year, the NPV is $(Round to the nearest cent.) Should you take the opportunity? (Select from the drop-down menu.) You take this opportunity. b. What is the NPV of the opportunity if the cost of capital is 2.4% per year? If the cost of capital is 2.4% per year, the NPV is $(Round to the nearest cent.) Should you take it now? (Select from the drop-down menu.) You take this opportunity at the new cost of capital.
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