Question
You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount
You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true? The present value of cash flows in Investment B is lower than the present value of cash flows in Investment A. The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B. The present value of cash flows in Investment A is equal than the present value of cash flows in Investment B. No comparison can be made - We need to know the cash flows to calculate the present value.
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