Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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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 is 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?
C
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 $
Should you take it now? (Select from the drop-down menu.)
You
take this opportunity at the new cost of capital.
(Round to the nearest cent.)
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Transcribed Image Text: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 is 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? C 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 $ Should you take it now? (Select from the drop-down menu.) You take this opportunity at the new cost of capital. (Round to the nearest cent.)
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