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
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 4 5 Investment A B C $ 3,000 $2,000 $ 4,000 4,000 2,000 4,000 5,000 2,000 (4,000) (6,000) 6,000 2,000 (4,000) 5,000 14,000 (Click on the icon in order to copy its contents into a spreadsheet.) What is the present value of each of these three investments if the appropriate discount rate is 12 percent? a. What is the present value of investment A at an annual discount rate of 12 percent? $9,017.70 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 12 percent? (Round to the nearest cent.)
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
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