You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive $ 500 one year from now, $1,500 two years from now, and $10,000 ten years from now.
a. What is the NPV of the investment opportunity if the interest rate is 10 % per year? Should you take the opportunity?
b. What is the NPV of the investment opportunity if the interest rate is 6 % per year? Should you take the opportunity?