6.12

You are given three investment alternatives to analyze.The cash flows from these three investments are asfollows:

End of Year:A. B.C.

11,000. 1,000. 5,000

2 2,000. 1,000. 5,000

3 3,000. 1,000. (5,000)

4(4,000) 1,000 (5,000)

5 4,000.4,000 15,000

What is the present value of investment A at an annual discount rate of 11 percent?

What is the present value of investment B at an annual discount rate of 11 percent?

What is the present value of investment C at an annual discount rate of 11 percent?