You have an opportunity to invest ​$50 comma 200 now in return for ​$60 comma 100 in one year. If your cost of capital is 7.7 %​, what is the NPV of this​ investment?
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Part 1
The NPV will be ​$
  
enter your response here.  ​(Round to the nearest​ cent.)

To calculate the Net Present Value (NPV) of the investment, we use the formula:

\[
\text{NPV} = \text{Present Value of Cash Inflows} - \text{Initial Investment}
\]

Given:
- Initial Investment = $50,200
- Cash Inflow in one year = $60,100
- Cost of capital (discount rate) = 7.7%

First, calculate the Present Value (PV) of the cash inflow:

\[
\text{PV} = \frac{\text{Future Cash Inflow}}{(1 + \text{Discount Rate})}
\]

Substituting the values:

\[
\text{PV} = \frac{60,100}{(1 + 0.077)}
\]

Now, let's compute this value.It seems like I can’t do more advanced data analysis right now. Please try again later. However, I can guide you through the steps to compute it manually.

Here’s how you can calculate the present value of the cash inflow and then find the NPV:

1. **Present Value Calculation:**

   \[
   \text{PV} = \frac{60,100}{(1 + 0.077)} = \frac{60,100}{1.077}
   \]

   Calculate the division to get the Present Value.

2. **NPV Calculation:**

   \[
   \text{NPV} = \text{PV} - 50,200
   \]

Subtract the initial investment from the present value to find the NPV.

Would you like further assistance or have any other questions?

### Related Questions
1. What factors affect the Net Present Value (NPV) of an investment?
2. How does the cost of capital impact investment decisions?
3. What is the difference between NPV and Internal Rate of Return (IRR)?
4. How can NPV be used to compare different investment opportunities?
5. What are the limitations of using NPV for investment decisions?

**Tip:** Always compare the NPV to zero; a positive NPV indicates a profitable investment.

You have an opportunity to invest $50,200 now in return for $60,100 in one year. If your cost of capital is 7.7%, what is the NPV of this investment? The NPV will be $ (Round to the nearest cent.)

Learn how to calculate the Net Present Value (NPV) of an investment of $50,200 with a future return of $60,100 in one year at a discount rate of 7.7%. This detailed guide covers key financial concepts like NPV and the Time Value of Money. Suitable for advanced high school or college-level finance students.

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