You have been offered a unique investment opportunity. If you invest $9,400 today, you will receive $470 one year from now, $1,410 two years from now, and $9,400 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.5% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.5% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.5% per year? f the cost of capital is 6.5% per year, the NPV is $. (Round to the nearest cent.)

You have been offered a unique investment opportunity. If you invest $9,400 today, you will receive $470 one year from now, $1,410 two years from now, and $9,400 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.5% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.5% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.5% per year? f the cost of capital is 6.5% per year, the NPV is $. (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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You have been offered a very long-term investment opportunity to increase your money one hundredfold. You can invest $500 today and expect to receive $50,000 in 40 years. Your cost of capital for this (very risky) opportunity is 19%. What does the IRR rule say about whether the investment should be undertaken? What about the NPV rule? Do they agree? The IRR of this investment opportunity is %. (Round to two decimal places.) C
You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $10.5 million today and $4.9 million in one year. The government will pay you $20.9 million in one year upon the building's completion. Suppose the interest rate is 10.1%. a. What is the NPV of this opportunity? b. How can your firm turn this NPV into cash today? a. What is the NPV of this opportunity? The NPV of the proposal is $ million. (Round to two decimal places.)
Please answer the question. The details of the question are attached in the image below.
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.
Your firm is considering an investment that will cost $750,000 today. The investment will produce cash flows of $250,000 in year 1, $300,000 in years 2 through 4, and $100,000 in year 5. What is the investment's discounted payback period if the required rate of return is 10%? Answer 3.33 years 3.16 years 2.67 years 2.33 years
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.)
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 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 =
1. You have an opportunity to invest $50,000 now in return for $60,000 in one year. If your cost of capital is 8%, what is the NPV of this investment?
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