Which of the following investments has a higher present value, assuming the same (strictly positive) interest rate applies to both investments? Year 1 2 3 4 Investment X Investment Y $5,000 $11,000 $7,000 $9,000 $9,000 $11,000 $7,000 $5,000 Select one: O a. Investment X and Investment Y have the same present value, since the total of the cash flows is the same for both O b. No comparison can be made-we need to know the interest rate to calculate the present value O c. Investment X has a higher present value. d. Investment Y has a higher present value.
Which of the following investments has a higher present value, assuming the same (strictly positive) interest rate applies to both investments? Year 1 2 3 4 Investment X Investment Y $5,000 $11,000 $7,000 $9,000 $9,000 $11,000 $7,000 $5,000 Select one: O a. Investment X and Investment Y have the same present value, since the total of the cash flows is the same for both O b. No comparison can be made-we need to know the interest rate to calculate the present value O c. Investment X has a higher present value. d. Investment Y has a higher present value.
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
Problem 1PS
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Transcribed Image Text:Which of the following investments has a higher present value, assuming the same (strictly
positive) interest rate applies to both investments?
Year
1
2
3
4
Investment X Investment Y
$5,000
$11,000
$7,000
$9,000
$9,000
$11,000
O
$7,000
$5,000
Select one:
O a. Investment X and Investment Y have the same present value, since the total of the cash
flows is the same for both
O
b. No comparison can be made-we need to know the interest rate to calculate the present
value
c. Investment X has a higher present value.
d. Investment Y has a higher present value.
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