Question
consider investment for projects A and B. the investments pay 8% annually and the following end-of-year payments: project A cash flows from year 1 to
consider investment for projects A and B. the investments pay 8% annually and the following end-of-year payments: project A cash flows from year 1 to 3 consecutively are R100, R200 and R400; project B cash flows from year 1 to 3 consecutively are R400, R200 and R100. required: 1. find the present value and future value for each of the project, 2. which project has higher present value and which project has higher future value and why?, 3. now consider a case where the investments pay 0% annually, recalculate the present values and future values for each project, which project has higher present b and which project has a higher future value and why?
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