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Kent Weitz wishes to assess whether the following investments are satisfactory: Use his required return (discount rate) of 16% to evaluate each investment. Make an
Kent Weitz wishes to assess whether the following investments are satisfactory: Use his required return (discount rate) of 16% to evaluate each investment. Make an investment recommendation to Kent. . The present value, PV, at the required rate of 16% for Income Stream A is $. (Round to the nearest cent.) The recommendation to Kent for Investment A is: (Select the best answer below.) O A. The present value (at 16% required return) of the income from Investment A, at $9,849.09, is greater than the $8,807 purchase price. Investment A should not be purchased. Kent will earn less than his required rate of return. O B. The present value (at 16% required return) of the income from Investment A, at $9.849.09, is greater than the $8,807 purchase price. Investment A should be purchased. Kent will earn more than his required rate of return. The present value, PV, at the required rate of 16% for Income Stream B is $. (Round to the nearest cent.) The recommendation to Kent for Investment B is: (Select the best answer below.) O A. The present value (at 16% required return) of the income from Investment B, at $13,343.42, is less than the $13,440 purchase price. Investment B should not be purchased. Kent will earn less than his required rate of return. O B. The present value (at 16% required return) of the income from Investment B, at $13,343.42, is less than the $13,440 purchase price. Investment B should be purchased. Kent will earn more than his required rate of return. Data table Investment A B Purchase Price $8,807 $13.440 End of Year Income Stream 1 $1,900 $6,000 2 $2.648 $5,307 3 $3,231 $4,529 4 $3,896 $1,500 5 $4.246 $1,044 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Print Done
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