three investment alternatives to analyze.
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
| Investment | Copy to Clipboard+Open in Excel+ | |||||||
| End of Year | A | B | C | |||||
| 1 | $ | 3,000 | $ | 2,000 | $ | 5,000 | ||
| 2 | 4,000 | 2,000 | 5,000 | |||||
| 3 | 5,000 | 2,000 | (5,000) | |||||
| 4 | (6,000) | 2,000 | (5,000) | |||||
| 5 | 6,000 | 5,000 | 15,000 |
What is the present value of each of these three investments if the appropriate discount rate is 12percent?
a.What is the present value of investment A at an annual discount rate of 12percent