Textbook Notes (368,439)
Canada (161,878)
Economics (818)
ECON 2560 (71)
Chapter 8

THEORY OF FINANCE CHAPTER 8.docx

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Department
Economics
Course
ECON 2560
Professor
Nancy Bower
Semester
Summer

Description
CHAPTER 8NET PRESENT VALUEConsider land costs 50000 construction 300000oShortage of office space predicted and that in the future you could sell for 400000To calculate present value we discount the expected future payoff by the rate of return offered by comparable investment alternativesoOpportunity cost of capitalNPVPresent Value PVrequired investmentValuing LongLived ProjectsoNet present value rule works for projects of any lengthoConsider identification of a tenant who would
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