Cash flow investment decision Personal Finance Problem Tom Alexander has an opportunity to purchase any of the investments shown in the following table, The purchase price, the
amount of the single cash inflow, and its year of receipt are given for each investment. Which purchase recommendations would you make, assuming that Tom can earn 10% on his investments?
Click the icon to see the Worked Solution (Formula Solution).
Click the icon to see the Worked Solution (Financial Calculator Solution).
Click the icon to see the Worked Solution (Spreadsheet Solution).
The present value of Investment A is $_____. (Round to the nearest cent.)
The present value of Investment B is $_____. (Round to the nearest cent.)
The present value of Investment C is $_____. (Round to the nearest cent.)
The present value of Investment D is $_____. (Round to the nearest cent.)
Which purchase recommendations would you make, assuming that Tom can earn 10% on his investments? (Select the best answer below.)
A. Investments B and C
B. Investment D
C. Investments A and C
D. Investment B
Data Table
(Click on the icon located on the top-right corner of the data table below in order
to copy its contents into a spreadsheet.)
Investment Price Single cash inflow Year of receipt
A $10,000 $14,641 3
B $300 $1,516 18
C $1,900 $4,480 8
D $500 $17,002 38
