Investment Year 1 Year 2 Year 3 $1,400 1,700 1,800 $1,500 1,500 1,500 B.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A company has two investment possibilities, with the following cash inflows:

If the firm can earn 7 percent in other investments, what is the present value of investments A and B? If each investment costs $4,000, is the present value of each investment greater than the cost of the investment?

Investment
Year 1
Year 2
Year 3
$1,400
1,700
1,800
$1,500
1,500
1,500
B.
Transcribed Image Text:Investment Year 1 Year 2 Year 3 $1,400 1,700 1,800 $1,500 1,500 1,500 B.
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