You Are Given Two Choices of Investments, Investment a and Investment

question 35

Multiple Choice

You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true?

• A) The present value of cash flows in Investment A is equal to the present value of cash flows in Investment B.
• B) The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B.
• C) The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B.
• D) No comparison can be made - we need to know the cash flows to calculate the present value.

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Definitions:

Selling Teams

Combinations of sales specialists whose primary duties are order getting, order taking, or sales support but who work together to service important accounts.

Sales Growth

The increase in sales over a specific period, indicating the success and expansion of a business.

Company Sales Force

The team or department within a company responsible for conducting sales and reaching out to customers.

Independent Agents

Salespeople who sell a manufacturer’s products on an extended contract basis but are not employees of the manufacturer; also known as manufacturer’s representatives or reps.