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imiyakawa
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Homework Statement
You are employed by a business to evaluate a proposed 1-year investment project that will cost $10,000 today, but generate for your firm certain earnings of $15,000 at the end of the year. The investment is thought to be virtually risk-free, but others in your firm are concerned about a possible worsening of cash flow problems that the firm is already experiencing. The problem with cash flows is hitting the firm hard, and with the firm's bank currently charging 20 percent on one-year loans.
Should the firm undertake the investment project? Justify your decision.
2. The attempt at a solution
I really have no idea! It looks like an NPV question, but I really have no idea..