Final answer:
The NPV of the investment is $5,555.56, calculated by discounting the future cash inflow of $60,000 by the cost of capital of 8% and subtracting the initial investment of $50,000. This positive NPV indicates a good investment.
Step-by-step explanation:
To calculate the Net Present Value (NPV) of the investment opportunity, we can use the formula NPV = Net Cash Inflow / (1 + r)n - Initial Investment, where r represents the cost of capital (interest rate) and n is the number of periods until cash inflow.
Given an investment of $50,000 now (Initial Investment) and a return of $60,000 in one year (Net Cash Inflow), with a cost of capital of 8.0%:
NPV = $60,000 / (1 + 0.08)1 - $50,000
NPV = $60,000 / 1.08 - $50,000
NPV = $55,555.56 - $50,000
NPV = $5,555.56
The NPV of the investment is $5,555.56. Since it's positive, it indicates that the investment would generate value above the cost of capital and could be considered a good investment.