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Question 2 You are considering investing in two different investment options. The first option offers no return for the first three years, but afterward it
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You are considering investing in two different investment options. The first option offers no return for the first three years, but afterward it offers to pay you $ per year for four years. The second option offers to pay you $ per year for three years and $ in the fourth year. All payments are made at yearend. If a discount rate of per annum is assumed, determine by using the present value the option that offers you a higher return.
Question
You are considering investing in two different investment options. The first option offers no return for the first three years, but afterward it offers to pay you $ per year for four years. The second option offers to pay you $ per year for three years and $ in the fourth year. All payments are made at yearend. If a discount rate of per annum is assumed, determine by using the present value the option that offers you a higher return.
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