Problem:
Consider a project that requires an initial investment of 99,000 and will produce a single cash flow of 153,000 in 4 years.
Required:
Question 1: What is the NPV of this project if the 4-year interest rate is 5.1% EAR?
Question 2: What is the NPV of this projcet if the 4-year interest rate is 10.1 (EAR)?
Question 3: What is the highest 4-year interest rate such that this project is still profitable?
Note: Show all workings.