If you require an 8 percent return and must invest USD500,000, which of the investment opportunities in
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If you require an 8 percent return and must invest USD500,000, which of the investment opportunities in Exhibit 1 should you prefer?
A. Opportunity 1 B. Opportunity 2 C. Indifferent between the two opportunities.
Transcribed Image Text:
Exhibit 1: Investment Opportunities Cash flows (in thousands) Opportunity 1 Opportunity 2 t=0 -500 -500 t = 1 195 225 t=2 195 195 t = 3 195 160.008
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