Which of following investments have lowest present value
Finance
Which of the following investments would have the ‘lowest’ present value?
Assume that the effective annual rate for all investments is the same and is
greater than zero.
Question options:
a) Investment C pays $125 at the beginning of every 6-month period for the
next 10 years (a total of 20 payments).
b) Investment E pays $250 at the beginning of every year for the next 10 years
(a total of 10 payments).
c) Investment B pays $125 at the end of every 6-month period for the next 10
years (a total of 20 payments).
d) Investment D pays $2,500 at the end of 10 years (just one payment).
e) Investment A pays $250 at the end of every year for the next 10 years (a
total of 10 payments
