You have a choice among three options. Option 1: receive $900 immediately. Option 2: receive $1,200 one year from now. Option 3: receive $2,000 five years from now. The interest rate is 15 percent. Rank these three options from highest present value to lowest present value.

Option 2

Option 3

Option 1

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator

Present value of option 1 = $900

For option 2 :

Cash flow in year 1 = $1200

I = 15%

Present value = $1,043.48

For option 3 :

Cash flow each year from year 1 to 4 = 0

Cash flow in year 5 = $2000

I = 15%

Present value =$ 994.35

From the above figures, option 2 has the highest present value, followed by option 3 and then option 1.

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).