Which of the following investments has a higher present value, assuming the same (strictlypositive) interest rate applies to both investments? $$\begin{array} { | c | c | c | }
\hline \text { Year } & \text { Investment } \mathrm { X } & \text { Investment } \mathrm { Y } \
\hline 1 & \$ 5,000 & \$ 11,000 \
\hline 2 & \$ 7,000 & \$ 9,000 \
\hline 3 & \$ 9,000 & \$ 7,000 \
\hline 4 & \$ 11,000 & \$ 5,000 \
\hline
\end{array}$$

Question

Which of the following investments has a higher present value, assuming the same (strictlypositive) interest rate applies to both investments? $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \text { Investment } \mathrm { X } & \text { Investment } \mathrm { Y } \
\hline 1 & \$ 5,000 & \$ 11,000 \
\hline 2 & \$ 7,000 & \$ 9,000 \
\hline 3 & \$ 9,000 & \$ 7,000 \
\hline 4 & \$ 11,000 & \$ 5,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Investment Y has higher cash flows earlier, which are discounted less, resulting in a higher present value compared to Investment X.

Which of the Following Investments Has a Higher Present Value