Your broker, the leading sales generator at the firm Dewey, Cheatem and Howe, calls you with...

Your broker, the leading sales generator at the firm Dewey, Cheatem and Howe, calls you with an investment opportunity. If you send him $2000 today, he will send back to you $1050 a year from now, and $1300 a year after that. You require a 12% annual return. Based on the present value of these future cash flows, is this a good investment?

Yes

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Expert Solution

Ans NO

THe project is not a good Investment since NPV is negative. Hence the project must be rejected.

jeff jeffy answered 2 years ago

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