Of the Following Investments, Which Would Have the Lowest Present

question 1

Multiple Choice

Of the following investments, which would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero.

• A) Investment A pays $250 at the end of every year for the next 10 years (a total of 10 payments).
• B) Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments).
• C) Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments).
• D) Investment D pays $2,500 at the end of 10 years (just one payment).
• E) Investment E pays $250 at the beginning of every year for the next 10 years (a total of 10 payments).

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Definitions:

Administrative Supplies

Items and materials used in the day-to-day administration and functioning of an office or organization.

Disposable Sheaths

Protective covers, often made of plastic or rubber, designed to be used once and then discarded to prevent contamination and ensure hygiene.

Insurance Forms

Documents required for processing insurance claims or applying for insurance policies.

Bandages

Materials used to support, protect, or compress injuries or wounds to control bleeding, absorb fluids, or hold dressings in place.