Which of the following investments has a higher present value, assuming the same (strictly positive) interest rate applies to both investments?

year investment x investment y
1 $5,000 $11,000
2 $7,000 $9,000
3 $9,000 $7,000
4 $11,000 $5,000

a. investment x has a higher present value.
b. investment y has a higher present value.
c. investment x and investment y have the same present value, since the total of the cash flows is the same for both.
d. no comparison can be made - we need to know the interest rate to calculate the present value.

B. Investment Y has a higher present value.

Explanation:

The cash inflows are given in the question for Investment X and Investment Y

Plus we know that the cash inflows and the number of years has an indirect relation

That means if the cash flows are the same for year 1 and 2 and in year 3 and year 4 so year 1 and year 2 present value would be higher as compared with the last year present value

Since in the question Investment Y has higher cash inflows in starting year but in Investment X has higher cash inflows in last year that interprets Investment Y has a higher present value

account balance book uk

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.