Question
You own building D and building F. The next cash flow for each building is expected in 1 year. Building D has a cost of
You own building D and building F. The next cash flow for each building is expected in 1 year. Building D has a cost of capital of 15.40 percent and is expected to produce annual cash flows of $239,976.00 forever. Building F is worth $3,873,341.00 and is expected to produce annual cash flows of $252,111.00 forever. Which assertion is true?
Building F is more valuable than building D and building D is more risky than building F | ||
Building F is more valuable than building D and building F is more risky than building D | ||
Building D is more valuable than building F and building D is more risky than building F | ||
Building D is more valuable than building F and building F is more risky than building D | ||
Building D and building F either have the same value, the same level of risk, or both the same value and level of risk. |
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