You are considering an investment project that will provide the following receipts/ disbursements.

You will pay $5,000 immediately and receive $2000 each year for three years, starting two years from today and receive $3000 each year for two years beginning 6 years from today. The investment will require an additional $2,50 be invested in year 5.

 If you assume a discount rate of 7.0%, the present value of this investment is

a.)$1250.15

b.)$1990.07

c.)$-1990.07

d.)$-1250.15

 Therefore, it is wise

a.) not to invest

b.)negative

c.)zero

d.)invest

In this project because it shows

a.) not to invest

b.)negative

c.)zero

d.)invest

e.)positive

net present value (NPV).

Answer rating: 100% (QA)

To calculate the present value of this investment and determine whether its wise to invest or not yo... View the full answer