Posted by **Taylor** on Thursday, October 25, 2012 at 1:04pm.

A company has identified the following investments as looking promising. Each requires an initial investment of $1.2 million. Which is the best investment?Question 4 options:

A) a perpetuity that generates a cash flow at the end of year 1 of $100,000, has a growth rate of 1.25%, and a cost of capital of 10%

B) a perpetuity that generates a cash flow at the end of year 1 of $800,000, has a growth rate of 2.25%, and a cost of capital of 12%

C) an investment that generates a cash flow of $400,000 at the end of each of the next five years, when the cost of capital is 6%

D) an investment that generates a cash flow of $200,000 at the end of each of the next ten years, when the cost of capital is 6%

- Finance -
**Larry**, Monday, November 3, 2014 at 9:58pm
B.

- Finance -
**Larry**, Monday, November 3, 2014 at 9:59pm
Maybe....?

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