(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The...
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Question:
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are asfollows:
Investment
End of Year
A
B
C
1
$
2,000
$
2,000
$
4,000
2
3,000
2,000
4,000
3
4,000
2,000
(4,000)
4
(5,000)
2,000
(4,000)
5
5,000
5,000
14,000
What is the present value of each of these three investments if the appropriate discount rate is 8 percent?
a.What is the present value of investment A at an annual discount rate of 8 percent?
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