All other things being equal, which of the following would be most attractive to an investor?
A) A cash outflow of $60,000 in six years.
B) A cash outflow of $10,000 each year for the next six years.
C) A cash outflow of $30,000 in year 1 and $30,000 in year 6.
D) A cash outflow of $60,000 today.
E) All of these would be equally attractive to an investor.

Question

Quizplus · Accepted Answer

A cash outflow of $60,000 in six years is most attractive because the present value of a future cash outflow is less than an immediate cash outflow, assuming a positive discount rate.

All Other Things Being Equal, Which of the Following Would