Question
Which of the following will increase the future value of the mixed cash flows for years 1 through 5 of $9,000; $4,000; $1,000; $5,000; and
Which of the following will increase the future value of the mixed cash flows for years 1 through 5 of $9,000; $4,000; $1,000; $5,000; and $2,000 respectively given a 10% discount rate? (There may be more than one correct answer for this question;
a. Increase the discount rate by 2%.
b. Switch cash flows for years 1 and 5 so that year 1 is $2,000 and year 5 is $9,000.
c. Switch cash flows for years 2 and 4 so that year 2 is $5,000 and year 4 is $4,000.
d. Switch cash flows for years 2 and 5 so that year 2 is $2,000 and year 5 is $4,000.
e. Switch cash flows for years 3 and 4 so that year 3 is $5,000 and year 5 is $1,000.
f. Decrease the discount rate by 2%.
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