What is frank best alternative

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Frank Zanca is considering three different investments that his broker has offered to him. The different cash flows are as follows:

End of Year

 

A

 

B

 

C

1

 

300

 

 

 

400

2

 

300

 

 

 

 

3

 

300

 

 

 

 

4

 

300

 

300

 

600

5

 

 

 

300

 

 

6

 

 

 

300

 

 

7

 

 

 

300

 

 

8

 

 

 

300

 

600

Because Frank only has enough savings for one investment, his broker has proposed the third alternative to be, according to his expertise, "the best in town." However, Frank questions his broker and wants to calculate the present value of each investment. Assuming a 15% discount rate, what is Frank's best alternative?

Reference no: EM132444192

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