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You are considering two projects with the following cash flows: Project A Project B Year 1 $ 2,500 $ 4,000 Year 2 3,000 3,500 Year
You are considering two projects with the following cash flows:
Project A | Project B | |
Year 1 | $ 2,500 | $ 4,000 |
Year 2 | 3,000 | 3,500 |
Year 3 | 3,500 | 3,000 |
Year 4 | 4,000 | 2,500 |
Which of the following statements are true concerning these two projects?
I. Both projects have the same future value at the end of year 4, given a positive rate of return.
II. Both projects have the same future value given a zero rate of return.
III. Both projects have the same future value at any point in time, given a positive rate of return.
IV. Project A has a higher future value than project B, given a positive rate of return.
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