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Finance

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Investment X offers to pay you $6,000 per year for nine years, whereas Investment Y offers to pay you $8,000 per year for six years. If the discount rate is 5 percent, Investment X has a present value of ? and Investment Y has a present value of ?. If the discount rate is 15 percent, Investment X has a present value of ? and Investment Y has a present value of ?

  • Finance - ,

    Assume a $4,000 investment and the following cash flows for two alternatives.
    Year InvestmentX Investment Y
    1 $1,000 $1,300
    2 800 2,800
    3 700 100
    4 1,900
    5 2,000

    a. Under the payback method, which investment should be chosen? (Show your work/analysis/calculations for each investment).

    b. Why do other methods allow for a better analysis?

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