To find the present value of a cash flow expected to be pald or recelved in the future, you will the future value cash flow by (1+1). What is the value today of a $12,000 cash flow expected to be recelved elght years from now 1 annual interest rate of 6% ? $6,023$11,670$9,411$7,529 Your broker called earlier today and offered you the opportunity to invest in a security. As a friend, he suggested that you compare the current, or present value, cost of the secunty and the discounted value of its expected future cash flows before deciding whether or not to invest. The decision rule that should be used to decide whether or not to invest should be: everything else being equal, you should invest if the present value of the security's expected future cash flows is less than the current cost of the security. everything else being equal, you should invest if the discounted value of the security's expected future cash flows is greater than or equal to the current cost of the security. everything else being equal, you should invest if the current cost of the security is greater than the present value of the security's expected future cash flows. Jing Associates, LLC, a large law firm in Denver, is bulling a new office complex. To pay for the construction, Jing Assodites is seliling a security that will pay the investor the lump sum of $6,750 in five years. The current market price of the security is $5,896. Assuming that you can eam an annual retum of 3.75% on your next most attractive investment, how much is the security worth to you today? $5,334 $7,019 $5,615 From strictly o financial perspective, should you invest in the Jing security? Yes No Why or why not? Because the discounted value of the security's future cash flows is greater than the cost of the security. Because the cost (market value) of the security is greater than the discounted value of the security's future cash flows