Consider two investment opportunities

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Reference no: EM132046391

Consider two investment opportunities. The first promises to make fixed quarterly payments of $1200 for 20 years, but the payments do not start until 4 years from now. The second promises to make fixed annual payments of $6000 forever, but the payments do not start until 8 years from now.

If the required return for both is 8%, which one do you prefer?

How much would you be willing to pay for each of these investments?

Reference no: EM132046391

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