Consider an investment project. The initial cost is $ 1 0 0 0 and the payments to
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Question:
Consider an investment project. The initial cost is $ and the payments to be received are $ after one year, $
after years, and $ after years.
a Draw the timeline.
b Compute the net present value of this investment project if the interest rate is
c At an interest rate of do you go ahead with the investment project? Explain your answer.
d Compute the net present value of this investment project if the interest rate is
e At an interest rate of do you go ahead with the investment project? Explain your answer.
f What general relationship between interest rate and investment can you draw? explain all steps
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