The NPV of the opportunity if the interest rate is 6% per year can be calculated using a discounted cash flow (DCF) analysis. This involves taking into account all expected cash flows associated with the project and discounting them by a certain rate in order to determine their present-day value. In this case, if we assume an initial investment of $20,000 followed by annual payments of $5,000 over five years then our DCF calculation would suggest an NPV of $10,980 ($20,000 + 5 x 0.94 x 5,000).
Whether or not you should take this opportunity ultimately depends on your desired rate of return versus the risk associated with it. If your expected return is higher than 6%, then this might indicate that it could be a profitable venture worth pursuing. On the other hand if you are only aiming for a 6% return and/or there is considerable risk involved then perhaps it would be better to look for other investment opportunities which have better returns with less uncertainty.
Overall understanding the financial implications behind any decision is essential for making informed decisions when investing money so that one’s investments yield maximum benefit while minimising potential losses at the same time.