Question 8 5 points Save Answ You are offered an investment that will pay $1,120 at...

Question

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Question 8 5 points Save Answ You are offered an investment that will pay $1,120 at the end of year 1, pay $1,460 at the end

Answer 1

Answer #1

NPV = -initial investment + PV of future cash flows

Present value = Future value/(1+i)^n

i = interest rate per period

n= number of periods

=>

NPV = 1120/1.09 + 1460/1.09^2 + 1694/1.09^3

= 3564.46

Answer 2

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