1. Frank spends $30,000 on an investment that will create $33,000 in revenues for a year. Assuming that the investment cost Frank 15%, do you think it would be a good investment?
Be sure to show your calculations.
2. If the cost of capital for number one was 6% would it be a good investment?
Be sure to show your calculations.
3. Explain the difference between Net Present Value and Internal Rate of Return. How might these concepts be important to a manager of a company? How might these concepts be important to you in your chosen career?