You have been offered a unique investment opportunity. If you invest $9,500 today, you will receive $475 one year from now, $1,425 two years from now, and $9,500 ten years from now. a. What is the NPV of the opportunity if the cost of capital 5.2% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.2% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5.2% per year? If the cost of capital is 5.2% per year, the NPV is $. (Round to the nearest cent.) Should you take the opportunity? (Select from the drop-down menu.) You take this opportunity. b. What is the NPV of the opportunity if the cost of capital is 1.2% per year? If the cost of capital is 1.2% per year, the NPV is $. (Round to the nearest cent.) Should you take it now? (Select from the drop-down menu.) You take this opportunity at the new cost of capital.

You have been offered a unique investment opportunity. If you invest $9,500 today, you will receive $475 one year from now, $1,425 two years from now, and $9,500 ten years from now. a. What is the NPV of the opportunity if the cost of capital 5.2% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.2% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5.2% per year? If the cost of capital is 5.2% per year, the NPV is $. (Round to the nearest cent.) Should you take the opportunity? (Select from the drop-down menu.) You take this opportunity. b. What is the NPV of the opportunity if the cost of capital is 1.2% per year? If the cost of capital is 1.2% per year, the NPV is $. (Round to the nearest cent.) Should you take it now? (Select from the drop-down menu.) You take this opportunity at the new cost of capital.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...

See similar textbooks

Similar questions

You have been offered a unique investment opportunity. If you invest $8,800 today, you will receive $440 one year from now, $1,320 two years from now, and $8,800 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.6% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.6% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.6% per year? If the cost of capital is 6.6% per year, the NPV is $ (Round to the nearest cent.)
You have been offered a unique investment opportunity. If you invest $8,900 today, you will receive $445 one year from now, $1,335 two years from now, and $8,900 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.7% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.7% per year? Should you take it now?
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.)
You have been offered a unique investment opportunity. If you invest, $10400 ?today, you will receive $520, one year from? now, $1560 two years from? now, and $10400 ten years from now. What is the NPV of the opportunity if the cost of capital is 2.4% per year? Please don't provide answer in image format thank you
K You have been offered a unique investment opportunity. If you invest $8,300 today, you will receive $415 one year from now, $1,245 two years from now, and $0,300 ton years from now a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? Should you take the opportunity b. What is the NPV of the opportunity if the cost of capital is 2.4% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.4% per year? If the cost of capital is 6.4% per year, the NPV is $ (Round to the nearest cent)
You have been offered a unique investment opportunity. If you invest $10,400 today, you will receive $520 one year from now, $1,560 two years from now, and $10,400 ten years from now. What is the NPV of the opportunity if the cost of capital is 6.5% per year?
You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive $500 one year from now, $1,500 two years from now, and $10,000 ten years from now. a. What is the NPV of the investment opportunity if the interest rate is 8% per year? Should you take the opportunity? b. What is the NPV of the investment opportunity if the interest rate is 4% per year? Should you take the opportunity? a. What is the NPV of the investment opportunity if the interest rate is 8% per year? The NPV of the investment opportunity if the interest rate is 8% per year is $. (Round to the nearest dollar.) Should you take the investment opportunity (Select the best choice below.) A. Reject it because the NPV is less than 0. B. Take it because the NPV is equal to or greater than 0. b. What is the NPV of the investment opportunity if the interest rate is 4% per year? The NPV of the investment opportunity if the interest rate is 4% per year is $ (Round to the nearest dollar.) Should…
You have an investment opportunity that requires an initial investment of $5,000 today and will pay $6,000 in one year. What is the rate of return of this opportunity? The rate of return for this opportunity is ____%.
You have an opportunity to invest $100,000 now in return for $79,700 in one year and $30,100 in two years. If your cost of capital is 9.4%, what is the NPV of this investment? The NPV will be $_______________ (Round to the nearest cent.)
You have an opportunity to invest $104,000 now in return for $79,100 in one year and $30,100 in two years. If your cost of capital is 9.3%, what is the NPV of this investment?
You are offered an investment with returns of $ 2,213 in year 1, $ 4,670 in year 2, and $ 3,184 in year 3. The investment will cost you $ 6,506 today. If the appropriate Cost of Capital is 7.6 %, what is the Net present Value of the investment?
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