Which of the Following Investments Has a Higher Present Value,assuming

question 63

Multiple Choice

Which of the following investments has a higher present value,assuming the same (strictly positive) interest rate applies to both investments?

• A) Investment X has a higher present value.
• B) Investment Y has a higher present value.
• C) Investment X and Investment Y have the same present value, since the total of the cash flows is the same for both.
• D) Investment Y has half the present value of Investment X.
• E) No comparison can be made - we need to know the interest rate to calculate the present value.

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