Suppose that you have an opportunity to invest in your cousins burgeoning ecommerce business. If...
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Suppose that you have an opportunity to invest in your cousins burgeoning ecommerce business. If you were to invest $5,000 now, your cousin guarantees that you will receive the following cash flows: $2,000 at the end of 2 years, $2,000 at the end of 4 years, and $3,000 at the end of 6 years. In order to finance this investment, you would withdraw cash from your TFSA which is generating returns at a rate of 6% compounded annually. Determine (a) the Net Present Value of this investment opportunity, (b) what your net profit or loss on this investment would be, and (c) state whether or not this investment would be profitable. Round your answers to the nearest cent.
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