Question
A company has two investment possibilities, with the following cash inflows: Investment Year 1 Year 2 Year 3 A $1,200 1,400 1,700 B $1,600 1,600
A company has two investment possibilities, with the following cash inflows:
| Investment | Year 1 | Year 2 | Year 3 |
| A | $1,200 | 1,400 | 1,700 |
| B | $1,600 | 1,600 | 1,600 |
If the firm can earn 6 percent in other investments, what is the present value of investments A and B? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. PV(Investment A): $ PV(Investment B): $
If each investment costs $4,000, is the present value of each investment greater than the cost of the investment? The present value of investment A is less than or greater than Item 3 the cost? The present value of investment B is less than or greater than Item 4 the cost?
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Managing Currency Options In Financial Institutions
Authors: Yat-Fai Lam, Kin-Keung Lai
1st Edition
1138778052, 978-1138778054
