You are offered an asset that costs $3,000 and has cash flows of $500 every Six month

Question:

You are offered an asset that costs $3,000 and has cash flows of $500 every Six month (end of period) for the next 10 years. Your cost of capital is 8.2 percent.

a. What is the IRR of the asset?

b. What is the NPV of the asset?

c. If your cost of capital is 8.2 percent, should you purchase it?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...