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(Solved): Project x has cash flows of $6,000,$4,000,$0, and $2,000 for Years 1 to 4 , respectively. Project Y ...
Project
xhas cash flows of
$6,000,$4,000,$0, and
$2,000for Years 1 to 4 , respectively. Project
Yhas cash flows of
$3,000,$3,000,$2,000, and
$4,000for Years 1 to 4 , respectively. Which one of the following statements is correct assuming the discount rate is positive? (No calculations needed) Multiple Choice Project
Yis worth less today than Project
xThe present value at Time 0 of the final cash flow for Project
xwill be discounted using an exponent of three. Soth sets of cash flows have equal present values as of Time 0. The cash flows for Project
Yare an annuity, but those of Project
xare not. Both projects have equal values at any point in time since they both pay the same total amount.
