A firm has four different investment options option a will


A firm has four different investment options. Option A will give the firm 10 million at the end of one year, 10 million at the end of two years, and 10 million at the end of three years. Option B will give the firm 5 million at the end of one year, 10 million at the end of two years, and 15 million at the end of three years. Option C will give the firm 15 million at the end of one year, 10 million at the end of two years, and 5 million at the end of three years.  Option D will give the firm 21 million at the end of the year, nothing at the end of two years, and 9 million at the end of three years.  Which of these options has the highest present value if the rate of interest is 5 percent?

 

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Macroeconomics: A firm has four different investment options option a will
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