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I have no idea about the 0 year in the following question. I am not sure that in the question the investment year is 5
I have no idea about the 0 year in the following question. I am not sure that in the question the investment year is 5 or 6 years ??Thank you.
Consider the stream of unequal cash flows from two investments in the table below. The initial outlay for both investments is $100,000. Ye Investment Investment ar A Cash Flow B Cash Flow 0 $(100,000) $(100,000) 1 $20,000 $10,000 2 $(10,000) $50,000 3 $50,000 $40,000 4 $40,000 $(20,000) 5 $30,000 $40,000 (a) Calculate the present value (PV) of each investment with a 5% discount rate. (b) Assuming a 5% discount rate, which investment would you prefer? Explain your answer. (c) In each investment, how long would it take to recover the initial outlayStep by Step Solution
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