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You own a building A and building B. The next cash flow for each building is expected in 1 year. Building A has a cost
- You own a building A and building B. The next cash flow for each building is expected in 1 year. Building A has a cost capital of 120% and is expected to produce annual cash flows of $102,225 forever. Building B is worth $2,351,703 and is expected to produce annual cash flows of $109,096 forever. Which assertion is true?
- Building B is more valuable than building A and Building A is more risky of building B.
- Building B is more valuable than building A and building B is more risky than building A
- Building A is more valuable than building B and building A is more risky than building B
- Building A is more valuable than building B and building B is more risky than building A
- Building A and building B either have the same value, same level of risk, or both have the same value and level of risk.
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