Corporate Finance view on the Marathon

Cost to join the race - $120
Cost of new sneakers - $125 (time 2 because mine were stolen)
Cost of an iPod - $159
Cost of Flights to Chicago - $300
Cost of 3 nights in a hotel room - $175
Cost of Meals in Chicago - $100
Cost of Massage after the race - $75
What is the NPV?

At this point the cost of the race, sneakers, and iPod are suck costs, so they are irrelevant. The cost of Investment therefore equals $550. No discount rate is necessary because all cash flow are in year one. We should include the opportunity cost of the time spent training, but since I'm a student and not making money anyway I will ignor it for now.

NPV = -Investment+Present Values of Cash Flows associated with Investment
Present Values of Cash Flows associated with Investment = ? 0?
NPV = $-550 + $0
NPV = $-550

According to the NPV rule, only accept a project if NPV >0, therefore I should reject the marathon!

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