You are considering investing in a start up company. The founder asked you for $200,000 today and you expect to get $1,0
Posted: Wed Apr 06, 2022 9:02 am
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.
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.