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

---

Definitions:

Gender Gap

The discrepancy in opportunities, status, attitudes, and pay between men and women.

Power Elite

A small group of powerful individuals, often from business, government, and the military, who hold significant power and influence over a society.

Autonomous State

A self-governing and independent political entity.

Pluralism

Pattern whereby groups maintain their distinctive culture and history.