You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true? 1. The present value of cash flows in Investment A is equal to the present value of cash flows in Investment B. 2. The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B. 3. The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B. 4. No comparison can be made - we need to know the cash flows to calculate the present value.
Answers: 3
Another question on Business
Business, 22.06.2019 19:40
Aprimary advantage of organizing economic activity within firms is thea. ability to coordinate highly complex tasks to allow for specialized division of labor. b. low administrative costs because of reduced bureaucracy. c. eradication of the principal-agent problem. d. high-powered incentive to work as salaried employees for an existing firm.
Answers: 1
Business, 22.06.2019 21:10
Which statement or statements are implied by equilibrium conditions of the loanable funds market? a firm borrowing in the loanable funds market invests those funds with a higher expected return than any firm that is not borrowing. investment projects which use borrowed funds are guaranteed to be profitable even after paying interest expenses. the quantity of savings is maximized, thus the quantity of investment is maximized. a loan is made at the minimum interest rate of all current borrowing.
Answers: 3
Business, 22.06.2019 23:30
Each state’s organizational structure is guided by the federal government.true or false?
Answers: 1
You know the right answer?
You are given two choices of investments, Investment A and Investment B. Both investments have the s...
Questions
Business, 11.10.2019 17:30
Social Studies, 11.10.2019 17:30
Mathematics, 11.10.2019 17:30
Mathematics, 11.10.2019 17:30
World Languages, 11.10.2019 17:30
Mathematics, 11.10.2019 17:30
Biology, 11.10.2019 17:30
Social Studies, 11.10.2019 17:30
