You are comparing two investment options that each pay 6 percent interest, compounded annually. Both options will provide you with $12,000 of income. Option A pays $2,000 the first year followed by two annual payments of $5,000 each. Option B pays three annual payments of $4,000 each. Which one of the following statements is correct given these two investment options? Assume a positive discount rate. Both options are of equal value since they both provide $12,000 of income. A) Option A has the higher future value at the end of year three. B) Option B has a higher present value at time zero. C) Option B is a perpetuity. D) Option A is an annuity.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “You are comparing two investment options that each pay 6 percent interest, compounded annually. Both options will provide you with $12,000 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Chris gilbert, 1966-68, was the first person in college football history, and the only ut player, to rush for more than 1000 yards in each of three consecutive seasons. in 1967 vs. tcu, he had texasâ longest run from scrimmage, 96 yards.
Answers (1)
A ___ in the money supply will cause interest rates to decrease which in turn causes spending to come?
Answers (1)
Navajo Corporation traded a used truck (cost $25,000, accumulated depreciation $22,500) for a small computer worth $4,125. Navajo also paid $625 in the transaction.
Answers (1)
The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below:Sales $950,000Variable expenses $380,000Fixed manufacturing expenses $362,000Fixed selling and
Answers (1)
Central banks are responsible for:
Answers (2)
New Questions in Business
If an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute?
Answers (1)
2. Which of the following is not one of the ways companies can achieve efficiency?
Answers (1)
The Chicago Tribune's published article about BP led to Select one: a. an increase in BP's stock price b. protests c. the positive popularity of BP d. health hazards
Answers (1)
Kathleen is a member of the human resource department at Jade Corp. Setting a goal to enhance the firm's strategy, Kathleen works to attain it by understanding the current human resources.
Answers (1)
The ratio of the number of companies offering both a stock-options incentive and one of the benefits listed to the number of companies offering that benefit is greatest for which of the five benefits? A. Health insurance B. Flex-time C.
Answers (1)