Alison has $5,000 to invest and is trying to decide between two investment opportunities. One investment offers her future cash flows of $2,000 for each of the next five years. Another investment offers her future cash flows of $5,000 in the fifth year and $7,500 in the sixth year. You tell her that in order for her to compare these two investments, she will need to calculate the _____ of the future cash flows.
a. common payout value
b. average annual payout
c. annuity value
d. net present value
You tell her that in order for her to compare these two investments, she will need to calculate the net present value of the future cash flows.
Question
Asked 11/3/2013 9:18:42 PM
Updated 9/8/2018 2:40:26 AM
1 Answer/Comment
Edited by
Masamune [9/8/2018 2:40:00 AM]
