At an Interest Rate of 10%, Which of the Following $\begin{array}{llcc}& \text { Year 1 } & \text { Year 2 } & \text { Year 3 }\end{array}$

question 95

Multiple Choice

At an interest rate of 10%, which of the following cash flows should you prefer?
$\begin{array}{llcc}& \text { Year 1 } & \text { Year 2 } & \text { Year 3 }\end{array}$

A. $\begin{array}{llcc}& 500 &\quad\quad 300 &\quad 100\end{array}$

B. $\begin{array}{llcc}& 100 &\quad\quad 300 & \quad500 \end{array}$

C. $\begin{array}{llcc}& 300 &\quad\quad 300 &\quad 300\end{array}$

D. $\text { Any of the above as they all add up to } \$ 900$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Unbalanced Value Flow

A situation in a business process where the value output is not proportional to the value input, leading to inefficiencies or waste.

Potential Risk

The possibility of a negative event occurring, which could lead to harm or loss.

Safest

Referring to the lowest risk condition or option, often used in the context of investments or decisions.

Conventional Bank

A financial institution that provides a range of traditional banking services, including accepting deposits and making loans, operating within a regulatory framework.