You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true?
A. The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B.
B. The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B.
C. The present value of cash flows in Investment A is equal to the present value of cash flows in Investment B.
D. No comparison can be madelong dash-we need to know the cash flows to calculate the present value.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Two farmers, A and B, each apply 100 tons of manure on their fields. To reduce manure runoff, the government has decided to require a permit for each ton of manure applied. The government gives each farmer 50 tradeable permits.
Answers (1)
Southwest Sands currently has 22,000 shares of stock outstanding. It is considering issuing $128,000 of debt at an interest rate of 7.5 percent. The break-even level of EBIT between these two capital structure options is $74,000.
Answers (1)
Which are examples of long-term goals? Select all that apply.
Answers (2)
What are the four different kinds of unemployment and the characteristics of each
Answers (1)
Unemployment is on the rise though inflation is quite low. Gross Domestic Product is rising but more slowly than the goal rate. The Federal Reserve may buy government securities in open market operations in order to: A.
Answers (1)
New Questions in Business
A structure within which executives, managers, specialists, and workers are broken out is commonly known as what type of structure?
Answers (1)
What way of calculating ROI makes it easiest to compare investments?
Answers (1)
Select the correct answer. Which assumption is a factor in Ricardo's Theory of International Trade? A. trade flow is restricted across borders B. trade laws are different in different nations C. labor is an irrelevant factor of production D.
Answers (1)
Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment strategy would be better. What would most strengthen argument for direct investment?
Answers (1)
A company has a defined benefit pension plan for its employees. On December 31, year one, the accumulated benefit obligation is $45,900, the projected benefit obligation is $68,100, and the fair value of the plan assets is $62,000.
Answers (2)