Consider two investments: Investment A requires an investment of $2 million today and promises $3 million in five years. Investment B requires an investment of $0.5 million today and at the beginning of the next four years, and promises $3 million at the end of five years. Which investment provides the better return?

Question

Quizplus · Accepted Answer

Investment A offers a better return because it requires a single upfront investment of $2 million, compared to Investment B's total investment of $2.5 million ($0.5 million each year for five years), for the same return of $3 million in five years.

Consider Two Investments: Investment a Requires an Investment of $2