Question
You have a choice of accepting either two 5-year cash flow stream or single amounts. You may accept alternative A or B-either as cash flow
You have a choice of accepting either two 5-year cash flow stream or single amounts. You may accept alternative A or B-either as cash flow stream or as single amount. At the end of five years, Alternative A will give you $7800 and Alternative B will give you $8200 . Assuming the opportunity cost is 8.5% compare the following cash flows of both options with their single amounts:
1. if you consider alternative A shall you go for single amount why? why not?
2. if you consider alternative B shall you go for single amount why ? why not?
3. bwteen A & B which one is acceptable for you and why?
please ans without excle only typing.
Alternative A End of year 1 2 3 Alternative B Beginning of Year 1 2 Cash flow tk780 780 780 780 780 WN - Cash flow tk750 720 720 750 750 5Step by Step Solution
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