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

question 27

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

Nurturance of Personhood

The act of supporting and fostering an individual's sense of self, identity, and personal growth, emphasizing the value of human uniqueness.

Heptane

A straight-chain alkane with seven carbon atoms in its molecule, often used as a nonpolar solvent in laboratories.

Moles

A unit of measurement used in chemistry to express amounts of a chemical substance, defined as containing exactly 6.02214076×10^23 particles.

Newman Projection

A method of visualizing the conformation of a chemical compound by projecting its bond structure along a chosen bond axis.