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Which of the following investments has a higher future value, assuming both have the same positive discount rate? LO2 Year Investment A Investment B 1
Which of the following investments has a higher future value, assuming both have the same positive discount rate? LO2
| Year | Investment A | Investment B |
|---|---|---|
| 1 | $10,000 | $2,000 |
| 2 | $6,000 | $6,000 |
| 3 | $2,000 | $10,000 |
Which of the following investments has a higher future value, assuming both have the same positive discount rate? LO2
| Year | Investment A | Investment B |
|---|---|---|
| 1 | $10,000 | $2,000 |
| 2 | $6,000 | $6,000 |
| 3 | $2,000 | $10,000 |
A. Both offer the same future value because the sum of the cash flows are identical.
B. No comparison can be made unless we know the discount rate for both investments.
C. Investment B offers the higher future value.
D. Investment A offers the higher future value.
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