Your grandmother gives you $10,000 to be invested in one of three opportunities: real estate, bonds, or

Question:

Your grandmother gives you $10,000 to be invested in one of three opportunities: real estate, bonds, or zero coupon bonds. If you invest the entire $10,000 in one of these opportunities with the expected cash flows shown below, which investment offers the highest NPV? Assume an 11 percent is appropriate for all three investments

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...