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

question 7

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 higher than the present value of cash flows in Investment B.
• B)The present value of cash flows in Investment A is equal to 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:

Neurobiological Regulation

The mechanisms by which the nervous system controls and regulates body functions and maintains homeostasis.

Crying

A loud vocal expression of emotion, typically a baby's first form of communication, indicating a range of needs or discomforts.

Positive Emotions

Feelings that are constructive, uplifting, and beneficial to well-being, such as happiness, love, contentment, and enthusiasm.

Enthusiasm

Intense and eager enjoyment, interest, or approval.