An investment costs $17,000 now. In exchange, you will be paid $6,000 per year for...
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An investment costs $17,000 now. In exchange, you will be paid $6,000 per year for the next three years. The bank interest rate is 5% compounded quarterly, where you make a loan of $5000 dollars. Tax rate is 30%. The cost of equity is 3%, where you funded the remaining investment after your loan from the equity. a. Find the NPV b. Calculate the IRR! c. Based on its NPV and IRR, will you accept the deal? Why d. Draw cost of capital rate (discount rate) to the NPV curve, and show the IRR point, and NPV point base don the cost of capital you found
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