You are considering two projects with the following cash flows: Project X Project Y Year 1 $7,000 $5,000 Year 2 6,000 4,000 Year 3 4,000 3,000 Year 4 1,000 6,000   Which of the following statements are true concerning these two projects? I. Both projects have the same future value at the end of year 4, given a positive rate of return. II. Project X has a higher present value than Project Y, given a positive discount rate. III. Both projects have the same future value given a zero rate of return. IV. Project Y has a higher present value than Project X, given a positive discount rate. Multiple choice options: II only I and III only II and III only II and IV only I, III, and IV only

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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You are considering two projects with the following cash flows:

Project X Project Y

Year 1 $7,000 $5,000

Year 2 6,000 4,000

Year 3 4,000 3,000

Year 4 1,000 6,000

 

Which of the following statements are true concerning these two projects?

I. Both projects have the same future value at the end of year 4, given a positive rate of return.

II. Project X has a higher present value than Project Y, given a positive discount rate.

III. Both projects have the same future value given a zero rate of return.

IV. Project Y has a higher present value than Project X, given a positive discount rate.

Multiple choice options:

II only

I and III only

II and III only

II and IV only

I, III, and IV only 

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