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Can you help me understand this type of problem. Annual cash flows from two competing investment opportunities are given. Each investment opportunity will require the
Can you help me understand this type of problem.
Annual cash flows from two competing investment opportunities are given. Each investment opportunity will require the same initial investment. (click the icon to view the competing investment opportunities.) Click the i on to view the Present Value of $1 table. Click the icon to view the Present Value of Annuity of $1 table. Requirement 1. Assuming a 12% interest rate, which investment opportunity would you choose? Begin by computing the present value of each investment opportunity. (Assume that the annual cash flows occur at the end of each year. If using present value tables, use factor amounts rounded to three decimal places, X.xxx. Round intermediary computations and your final answer to the nearest whole dollar.) The present value of investment opportunity A isS and the present value of investment opportunity B is S Investment opportunity should be chosen because the present value of cash flowi han the present value of investment opportunity Data Table Investment Year S 7,000 S 8,000 8,000 5,000 2000 8,000 S 24,000 S 24,00 Print Done
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