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 | $ | 1,000 | $ | 1,000 | $ | 5,000 | |||
| 2 | 2,000 | 1,000 | 5,000 | ||||||
| 3 | 3,000 | 1,000 | (5,000) | ||||||
| 4 | (4,000) | 1,000 | (5,000) | ||||||
| 5 | 4,000 | 5,000 | 15,000 | ||||||
What is the present value of each of these three investments if the appropriate discount rate is
11
percent?
a.What is the present value of investment A at an annual discount rate of
11
percent?
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Money Banking And Financial Markets
Authors: Stephen Cecchetti
2nd Edition
0073523097, 9780073523095
