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Question 5: You are an investor considering the following two investments with the option of either receiving future cashflows OR a single payment at time
Question 5: You are an investor considering the following two investments with the option of either receiving future cashflows OR a single payment at time zero under any of the two alternatives as given below Cash flow stream End of year Alternative A Alternative B $700 $1,100 1. 900 700 700 700 500 4. 700 700 300 Single amount $2,825 $2,800 At time zero Required: Showing all your workings, decide which investment alternative [one amount at time zero (A or B) OR single payment (A or B)] you would prefer. The required rate of return is 9%
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