You have an opportunity to invest $105,000 now in return for $79,000 in one year and...

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You have an opportunity to invest $105,000 now in return for $79,000 in one year and...

You have an opportunity to invest $105,000 now in return for $79,000 in one year and $29,900 in two years. If youre cost of capital is 9.4%, what is the NPV of this investment?

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Answer 1

Answer #1

Year	Cash Flow	Discount factor	Present value
a	b	c=1.094^-a	d=b*c
0	$ -1,05,000.00	1.0000	$ -1,05,000.00
1	$ 79,000.00	0.9141	$ 72,212.07
2	$ 29,900.00	0.8355	$ 24,982.54

	NPV		$ -7,805.40

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Answer 2

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