Question

Assume that two investments both have a three-year life span and they will generate the following cash flows at the end of each year. If the appropriate discount rate is 7%, which of the two would you prefer? Year Investment A Investment B 1 $1,000 $1,200 2 $1,000 $1,000 3 $1,000 $800 Investment B, because even though the total CFs from both projects equal $3,000, B gives you the largest cash flows in earlier years Investment A, since it has the most even cash flows Neither, since they both have equal lives Both investments are equally attractive None of the above

          Assume that two investments both have a three-year life span and they will generate
the following cash flows at the end of each year. If the appropriate discount rate is
7%, which of the two would you prefer?
Year Investment A Investment B
1 $1,000 $1,200
2 $1,000 $1,000
3 $1,000 $800
Investment B, because even though the total CFs from both projects equal
$3,000, B gives you the largest cash flows in earlier years
Investment A, since it has the most even cash flows
Neither, since they both have equal lives
Both investments are equally attractive
None of the above

assume that two investments both have a three year life span and they will generate the following cash flows at the end of each year if the appropriate discount rate is 7 which of the two wo 70685

Added by Brian N.

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