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Consider an investment that will pay you $3,000 per month for each of the next 3...

Consider an investment that will pay you $3,000 per month for each of the next 3 years, and then $5,000 per month in the following 5 years.

If your required rate of return on this investment is 18 percent per year, what is the most you would be willing to pay for it?

NOTE: Your cash flow worksheet does NOT incorporate the P/Y setting.Thus, you must use periodic interest rates when calculating the NPV with irregular cash flows.

Suppose you can purchase this investment for $150,000. What is its net present value? Should you purchase this investment?

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