Which of the following investments has a higher present value, assuming the same (strictly positive) interest rate applies to both investments? Year Investment X Investment Y $5,000 $7,000 $9,000 $11,000 $11,000 $9,000 $7,000 4 $5,000 O A. Investment X and Investment Y have the same present value, since the total of the cash flows is the same for both. OB. Investment X has a higher present value. OC. Investment Y has a higher present value. OD. No comparison can be made-we need to know the interest rate to calculate the present value.

Which of the following investments has a higher present value, assuming the same (strictly positive) interest rate applies to both investments? Year Investment X Investment Y $5,000 $7,000 $9,000 $11,000 $11,000 $9,000 $7,000 4 $5,000 O A. Investment X and Investment Y have the same present value, since the total of the cash flows is the same for both. OB. Investment X has a higher present value. OC. Investment Y has a higher present value. OD. No comparison can be made-we need to know the interest rate to calculate the present value.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.12: Uneven, Or Irregular, Cash Flows

Problem 3ST

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