Considering two investment options

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Reference no: EM131045237

You are considering two investment options. In option A, you have to invest $4500 now and $800 three years from now. In option B, you have to invest $4000 now, $1200 a year from now, and $1000 three years from now. In both options, you will receive four annual payments of $1800 each. (You will get first payment a year from now) What are the present worth of option A and B. Which of these options would you choose based on the present worth criterion, assuming 8% interest? Assume that all cash flows occur at the end of a year.

Reference no: EM131045237

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