You are considering an investment, which requires an upfront cost (today) of $2,000. The expected cash flows

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You are considering an investment, which requires an upfront cost (today) of $2,000. The expected cash flows of this investment opportunity are $8,000 in 1 year, -$2,000 in 2 years, and $8,000 in 3 years. The interest rate is 5% per year. a) Calculate the NPV of the investment opportunity. b) Should you accept the project? c) Why should you not use the IRR rule to evaluate this investment opportunity? Explain concisely.

Posted Date: May 18, 2024 01:04 PM

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You are considering an investment, which requires an upfront cost (today) of $2,000. The expected cash flows

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