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Home Q & A Board Other Fields Homework Help Business Management
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stranahan stranahan
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7 years ago
You are presented with two cash flow options: Option Near, a $5,000 annuity for three years, with the first cash flow one year from today, or Option Far, a $5,000 annuity for six years with the first cash flow ten years from today. Assuming an interest rate of 7.0%, which set of cash flows has a greater present value?
A) Option Far has a greater PV of $30,000 vs. Option Near PV of $15,000.
B) Option Far has a greater PV of $13,121.58 vs. Option Near PV of $12,963.41.
C) Option Near has a greater PV of $13,121.58 vs. Option Far PV of $12,963.41.
D) Option Near and Option Far have the same PV of $12,963.41.
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Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
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tokentame78tokentame78
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7 years ago
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stranahan Author
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#2
7 years ago
Thank you very much for this. It's really helpful.
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