You are considering investing in a start up company. The founder asked you for $200,000 today and you expect to get $1,0

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answerhappygod
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You are considering investing in a start up company. The founder asked you for $200,000 today and you expect to get $1,0

Post by answerhappygod »

You are considering investing in a start up company. The founder
asked you for $200,000 today and you expect to get $1,010,000  in 9
years. Given the riskiness of the investment​ opportunity, your
cost of capital is 23%. What is the NPV of the investment​
opportunity? Should you undertake the investment​ opportunity?
Calculate the IRR and use it to determine the maximum deviation
allowable in the cost of capital estimate to leave the decision
unchanged.
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