You have an opportunity to invest $103,000 now in return for $79,000 in one year and...

Question

Question

You have an opportunity to invest

$103,000 now in return for $79,000

in one year and $29,900 in two years. If your cost of capital is 8.8%, what is the NPV of this investment?

The NPV will be $

Answer 1

Answer #1

NPV = -Initial Investment + PV of Cash Inflows

NPV = -103,000 + 79,000/(1.088) + 29,900/(1.088)2

NPV = -$5,130.87

Answer 2

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