Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
A company has two investment possibilities, with the following
Investment | Year 1 | Year 2 | Year 3 |
A | $1,500 | 1,900 | 2,200 |
B | $1,400 | 1,400 | 1,400 |
If the firm can earn 6 percent in other investments, what is the
PV(Investment A): $
PV(Investment B): $
If each investment costs $4,000, is the present value of each investment greater than the cost of the investment?
The present value of investment A is -Select-less than greater than Item 3 the cost.
The present value of investment B is -Select-less than greater than Item 4 the cost.
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