Project A has cash flows of $4,000, $3,000, $0, and $3,000 for Years 1 to 4, respectively. Project B has cash flows of $2,000, $3,000, $2,000, and $3,000 for Years 1 to 4, respectively. Which one of the following statements is correct assuming the discount rate is positive? (No calculations needed)
A) The cash flows for Project B are an annuity, but those of Project A are not.
B) Both sets of cash flows have equal present values as of Time 0.
C) The present value at Time 0 of the final cash flow for Project A will be discounted using an exponent of three.
D) Both projects have equal values at any point in time since they both pay the same total amount.
E) Project B is worth less today than Project A.
Correct Answer:
Verified
Q1: An ordinary annuity is best defined as:
A)
Q2: You are comparing two annuities that offer
Q3: A perpetuity is defined as:
A) a limited
Q4: Your credit card charges you .85 percent
Q6: The interest rate that is most commonly
Q7: You are comparing two investment options that
Q8: Which one of these statements related to
Q9: Amortized loans must have which one of
Q10: Which one of the following statements related
Q11: Project X has cash flows of $8,500,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents