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A man named Carlos, dressed in a red tie and cowboy boots, shows up at Wahid's office and makes the following business proposition: I've got
A man named Carlos, dressed in a red tie and cowboy boots, shows up at Wahid's office and makes the following business proposition: "I've got the best screenplay development software on the market. It's guaranteed to boost your revenues by $ by the end of the year. III lease it to you for the year for $ cash up front."
What is the present value of the investment if the interest rate is percent?
A $
B $
C $
D $
Is it a smart investment?
A No because the price of the investment today is less than the present value of investment's stream of future revenues.
B No because the present value of investment's stream of future revenues is greater than the price of the investment today.
C Yes, because the price of the investment today is greater than the present value of investment's stream of future revenues.
D Yes, because the present value of investment's stream of future revenues is greater than the price of the investment today,
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