Question

FINANCE: The investment project is expected to generate cash flows over the next 10 years. It will pay $0 in each of the years 1-5 and $200 in each of the years 6-10 (5 payments). If you seek to earn 8% per year, what is the maximum amount of money you can invest into the project? IS THIS CORRECT???

The investment project is expected to generate cash flows over the next 10 years. It will pay $0 in each of the years 1-5 and

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Answer #1

1 year - - A B cf 2. 1 $ 3 2 $ 4 3 $ 5 4 $ 6 5 $ 7 6 $ 200.00 8 7 $ 200.00 9 8 $ 200.00 10 9 $ 200.00 11 10 $ 200.00 12 Maxim

Calc:

1 year A B cf 2 1 0 3 2 0 4 3 0 5 4 0 6 5 0 7 6 200 8 7 200 98 200 10 9 200 11 10 200 12 Maximum amt. =NPV(8%,B2:B11)

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