You have been offered a unique investment opportunity. If you invest $9,600 today, you will receive $480 one year from now, $1,440 two years from now, and $9,600 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 5.4% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.4% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5.4% per year? If the cost of capital is 5.4% per year, the NPV is $. (Round to the nearest cent.)

You have been offered a unique investment opportunity. If you invest $9,600 today, you will receive $480 one year from now, $1,440 two years from now, and $9,600 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 5.4% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.4% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5.4% per year? If the cost of capital is 5.4% per year, the NPV is $. (Round to the nearest cent.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 21P: Your division is considering two investment projects, each of which requires an up-front expenditure...

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