East Coast Athletics is planning to sell its Wilmington, Philadelphia, and Boston gyms. The firm expects to sell its Wilmington gyrn for a cash flow of $A, its Philadelphia gym for a cash flow of $A, and its Boston gym for a cash flow of $B. The firm expects to sell its Wilmington gym in T years, its Philadelphia gym in 5 years, and its Boston gym in S years. The cost of capital for all three gyms is Y, A > B>O, S > T> 0, and Y> 0. The cash flows from the sales are the only cash flows associated with the various gyms. Based on the information in the preceding paragraph, which one of the following assertions is true? O None of the above assertions is true O The Wilmington gym is the most valuable of the 3 gyms O The Boston gym is the most valuable of the 3 gyms Two of the three gyms have equal value and those two gyms are more valuable than the third gyms or all three gyms have the same value O The Philadelphia gym is the most valuable of the 3 gyms

Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
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Chapter2: Second-order Linear Odes
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East Coast Athletics is planning to sell its Wilmington, Philadelphia, and Boston gyms. The firm expects to sell its Wilmington gyrn for a
cash flow of $A, Its Philadelphia gym for a cash flow of $A, and its Boston gym for a cash flow of $B. The firm expects to sell its Wilmington
gym in T years, its Philadelphia gym in 5 years, and its Boston gym in S years. The cost of capital for all three gyms is Y. A > B>0, S > T > 0,
and Y> 0. The cash flows from the sales are the only cash flows associated with the various gyms. Based on the information in the
preceding paragraph, which one of the following assertions is true?
O None of the above assertions is true
O The Wilmington gym is the most valuable of the 3 gyms
O The Boston gym is the most valuable of the 3 gyms
O Two of the three gyms have equal value and those two gyms are more valuable than the third gyms or all three gyms have the same value
O The Philadelphia gym is the most valuable of the 3 gyms
Transcribed Image Text:East Coast Athletics is planning to sell its Wilmington, Philadelphia, and Boston gyms. The firm expects to sell its Wilmington gyrn for a cash flow of $A, Its Philadelphia gym for a cash flow of $A, and its Boston gym for a cash flow of $B. The firm expects to sell its Wilmington gym in T years, its Philadelphia gym in 5 years, and its Boston gym in S years. The cost of capital for all three gyms is Y. A > B>0, S > T > 0, and Y> 0. The cash flows from the sales are the only cash flows associated with the various gyms. Based on the information in the preceding paragraph, which one of the following assertions is true? O None of the above assertions is true O The Wilmington gym is the most valuable of the 3 gyms O The Boston gym is the most valuable of the 3 gyms O Two of the three gyms have equal value and those two gyms are more valuable than the third gyms or all three gyms have the same value O The Philadelphia gym is the most valuable of the 3 gyms
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