The net present value (NPV) of an investment that costs $4320 and pays $1600 certain at the end of one, three, and five years is closest to ________

Suppose the term structure of interest rates is shown below:

Term 1 year 2 years 3 years 5 years 10 years 20 years
Rate
(EAR%) 5.00% 4.80% 4.60% 4.50% 4.25% 4.15%

A) $91.37
B) $137.05
C) $114.21
D) -$114.21


Answer: D

Business

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