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Consider the following cash flows for investments X and Y. Year Investment X Investment Y 0 $5,000 $11,000 1 $7,000 $9,000 2 $9,000 $7,000 3
Consider the following cash flows for investments X and Y. Year Investment X Investment Y 0 $5,000 $11,000 1 $7,000 $9,000 2 $9,000 $7,000 3 $11,000 $5,000 If each investment has the same positive interest rate, which of the following statements must be TRUE? a. The PV of investment X is greater than that of investment Y. Ob. The PV of investment X is equal to that of investment Y. Oc. The PV of investment X is less than that of investment Y. Od. We must know the interest rate to determine if the PV of investment X is greater than, less than, or equal to that of investment Y
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