Question
Q1: Project 1 states the return of principal in small amounts. A carrier service opens up a promotion with the customer's current device to be
Q1: Project 1 states the return of principal in small amounts. A carrier service opens up a promotion with the customer's current device to be traded in and offers a latest device and gives back the value of the traded device. However, they dont transfer the whole balance at once, they do it in small amounts. (They carry forward the principal towards new device)
Project 2 and 6 are easy to understand with the most well known company named Apple and its stock market price. Investing in the stock market for Apple right before the company launches a new device may upscale the profit. Eventually, after the quarter completes, it just stays constant until the next device is launched. Moreover, the next device also bumps up the cash flow.
Project 3 may end with the risk of losing the cash flow. This project can take the reference of Cryptocurrency where you can get them with some specific price. On the other hand, with the increasing demand of digital currency, there is a possibility of a big cash out with designated time.
Project 4, 7 and 8 can be projected with the similarity of real estate business. In this business, the x amount of property can be bought and rent it out for the consistent amount of cash flow. Therefore, the property with x amount may raise with the period of time and bring the xy amount.
Project 5 is an annuity where the employees consider a 401K retirement plan.
Q2: In order to evaluate the projects based on the simple cash flows, it is significant to equalize the cash flow. The cash received in the present might be more valuable than in the future. Thus, it is necessary to recognize the cash flow in real time.
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