accounting
An investment under consideration has a payback of five years and a cost of $1,200. If the required return is 20 percent, what is the worst-case NPV?
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The worst-case NPV for this investment would be 0. This is because the payback period of this investment is 5 years, and since the required return of 20% implies a cost of capital of 20%, a payback period of 5 years does not meet the required return and thus the NPV would be zero.
