Tom Alexander has an opportunity to purchase any of the investments shown in the following table Investment Price Single cash inflow Year of Receipt A $18,000 $30,000 5 B $600 $3,000 20 C $3,500 $10,000 10 D $1,000 $15,000 40 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? The present value of Investment A is $ The present value of Investment B is $ The present value of Investment C is $ The present value of Investment D is $ Which purchase recommendations would you make, assuming that Tom can earn 10% on his investments? A.Investment B B.Investments A and C C.Investments B and C D.Investment D
Tom Alexander has an opportunity to purchase any of the investments shown in the following table Investment Price Single cash inflow Year of Receipt A $18,000 $30,000 5 B $600 $3,000 20 C $3,500 $10,000 10 D $1,000 $15,000 40 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? The present value of Investment A is $ The present value of Investment B is $ The present value of Investment C is $ The present value of Investment D is $ Which purchase recommendations would you make, assuming that Tom can earn 10% on his investments? A.Investment B B.Investments A and C C.Investments B and C D.Investment D
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Tom Alexander has an opportunity to purchase any of the investments shown in the following table
|
Investment
|
Price
|
Single
|
Year of Receipt |
|
A
|
$18,000
|
$30,000
|
5
|
|
B
|
$600
|
$3,000
|
20
|
|
C
|
$3,500
|
$10,000
|
10
|
|
D
|
$1,000
|
$15,000
|
40
|
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?
The present value of Investment A is $
The present value of Investment B is $
The present value of Investment C is $
The present value of Investment D is $
Which purchase recommendations would you make, assuming that Tom can earn 10% on his investments?
A.Investment B
B.Investments A and C
C.Investments B and C
D.Investment D
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