recent year's data. b. Assuming that the two investments are equally risky, which one should Paul recommend? Why? P8-2 Return calculations For each of the investments shown in the following table, calcu- late the rate of return earned over the unspecified time period. Investment A B Cash flow during period $2,800 16,000 700 3,580 --500 Beginning-of End-of- period value period value $ 23,400 $ 20,100 225,000 324,000 6,500 8,000 36,600 46,500 62,700 52,800 C D E P8-3 Risk preferences Stephen So, the financial manager for Cathay Pacific Incorpora- tion, wishes to evaluate three prospective investments: A, B, and C. Stephen will