... )400,18$900,261000,300873.2500,93000,100935.1000,150000,1500.10ValuePresentFlowCashFactorDiscountPeriod207.1107.11==++=−−=−−TotalNPV20Rate of Return Rulew Accept investments that offer rates of returnin excess of their opportunity cost of capital.ExampleIn the project listed below, ... rate22Opportunity Cost of CapitalExampleYou may invest $100,000 today. Depending on thestate of the economy, you may get one of threepossible cash payoffs:140,000110,000$80,000PayoffBoomNormalSlumpEconomy000,110$3000,140000,100000,80C ... .14350,000350,000400,000investmentprofitReturn =−==39Present ValuesExampleAssume that the cash flowsfrom the construction and sale of an office building is asfollows. Given a 7% requiredrate of return, create...