Author Question: Ricky is thinking about borrowing 10,000 from Fred. He promises Fred cash flows of 5000 for the next ... (Read 47 times)

Marty · **on:** Jul 1, 2018

Ricky is thinking about borrowing 10,000 from Fred. He promises Fred cash flows of 5000 for the next three years. If Fred's cost of capital is 10, what is the Net Present Value of the investment for Fred?
a. -126.55
b. 1,342.76
c. 2,434.26
d. -1,322.31

Question 2

What is the maximum that the firm can charge for the no-name brand wok without losing customers?
a. 50
b. 60
c. 70
d. 100