Question
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A B C
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
| Investment |
| ||||||||
| End of Year | A | B | C | ||||||
| 1 | $ | 2 comma 0002,000 | $ | 3 comma 0003,000 | $ | 4 comma 0004,000 | |||
| 2 | 3 comma 0003,000 | 3 comma 0003,000 | 4 comma 0004,000 | ||||||
| 3 | 4 comma 0004,000 | 3 comma 0003,000 | ( 4 comma 000 )(4,000) | ||||||
| 4 | ( 5 comma 000 )(5,000) | 3 comma 0003,000 | ( 4 comma 000 )(4,000) | ||||||
| 5 | 5 comma 0005,000 | 5 comma 0005,000 | 14 comma 00014,000 | ||||||
What is the present value of each of these three investments if the appropriate discount rate is
1111
percent?
a.What is the present value of investment A at an annual discount rate of 11 percent?
b. What is the present value of investment B at an annual discount rate of 11 percent?
c. What is the present value of investment C at an annual discount rate of 11 percent?
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Handbook Of Income Distribution Volume 2B
Authors: Anthony B. Atkinson, Francois Bourguignon
1st Edition
0444594299, 978-0444594297
