The present value of the following 2 cash flows are

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Reference no: EM13378696

The Present value of the following 2 cash flows are equivalent if the interest rate is i. Which one is more valuable if the interest rate is 2i?

Hint:Equations of future and present value are:

F=P(1+i)^n

P=F(1+i)^-n

Option 1 = 3 periods

Option 2 = 2 periods

Reference no: EM13378696

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