The Following Show Four Mutually Exclusive Investments

question 105

Multiple Choice

The following show four mutually exclusive investments.Which is the best investment?

• A)Initial investment: $1.1 million;Cash flow in year 1: $160,000;Annual Growth Rate: 2%;Cost of Capital: 9.0%
• B)Initial investment: $1.2 million;Cash flow in year 1: $150,000;Annual Growth Rate: 2%;Cost of Capital:7.0%
• C)Initial investment: $1.3 million;Cash flow in year 1: $160,000;Annual Growth Rate: 1%;Cost of Capital: 6%
• D)Initial investment: $1.4 million;Cash flow in year 1: $150,000;Annual Growth Rate: 2%;Cost of Capital: 8%

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Definitions:

Humans

The species Homo sapiens, characterized by their bipedalism, high brain volume relative to body size, and advanced cognitive abilities.

Homo Erectus

"Upright human." A species within the genus Homo first appearing just after 2 million years ago in Africa and ultimately spreading throughout the Old World.

Oligocene Era

A geologic epoch of the Paleogene Period, occurring from about 34 to 23 million years ago, during which mammals and birds evolved considerably.

Continental Drift

In the theory of plate tectonics, the movement of continents embedded in underlying plates on the earth's surface in relation to one another over the history of life on earth.