A Firm Has Four Different Investment Options

question 152

Multiple Choice

A firm has four different investment options.Option A will give the firm $10 million at the end of one year,$10 million at the end of two years,and $10 million at the end of three years.Option B will give the firm $5 million at the end of one year,$10 million at the end of two years,and $15 million at the end of three years.Option C will give the firm $15 million at the end of one year,$10 million at the end of two years,and $5 million at the end of three years.Option D will give the firm $21 million at the end of one year,nothing at the end of two years,and $9 million at the end of three years.Which of these options has the highest present value if the rate of interest is 5 percent?

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

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Definitions:

Instrumentality

In organizational psychology, the perceived relationship between performance and the attainment of certain outcomes.

Performance Accomplishment

Achieving specific goals or standards of work that are recognized as an indicator of competence.

Commutative Justice

focuses on fairness in the exchange between individuals, ensuring a balance of give and take.

Sexual Harassment Complaint

A formal report made by an individual alleging unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature in the workplace or learning environment.