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Assume that two investments have a three-year life and generate the cash flows shown below. Which of the two would you prefer? Year Investment A

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Assume that two investments have a three-year life and generate the cash flows shown below. Which of the two would you prefer? Year Investment A Investment B 1 $5,000 $9,000 2 $5,000 $5,000 3 $5,000 $1,000 Investment B, since it gives you the largest cash flows in earlier years Neither, since they both have equal lives Both investments are equally attractive Investment A, since it has the most even cash flows

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