Comparing two separate investments

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Reference no: EM132003348

1. You are comparing two separate investments. each one is for a period of 10 years and pays 2.500 a year. you require 10 percent return on these invsments. Investment A pays at the begining of each year and investment B pas at the end of each year. Given this situation, which one of the following statment is accurate:

a. both invsment are equally valuble today.

b. insment b is worth more today because of the timing of its cash flows.

c. invsement A is worth more today because you wil recive ten payments hwereas invsment B only pays nine payments

d. insment B has both a higher present value and a higher future value than invsment B

e. insment a has a higher present value and lower future value than invsment B.

2. Steve just computed the present value of a $10,000 bonus he will receive in the future. The interest rate he used in this process is referred to as which one of the following?

3. Your coin collection contains 40 1955 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2059, assuming they appreciate at a 11 percent annual rate?

Reference no: EM132003348

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