ou have an opportunity to invest $ 110 000 now in return for $ 79 500...

ou have an opportunity to invest

$ 110 000

now in return for

$ 79 500

in one year and

$ 29 700

in two years. If your cost of capital is

8.6 %

what is the NPV of this investment?

Solutions

Expert Solution

Present value of cash inflow = 79500/(1+8.6%) + 29700/(1+8.6%)^2 =	98386.80

NPV = Present value of cash inflow - Present value of cash outflow = 98386.80 - 110000 =	-11613.20

jeff jeffy answered 1 year ago

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