The prevailing discount rate is 15 per annum firm fs cash, Ask an Expert

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The prevailing discount rate is 15% per annum. Firm F's cash flows start with $500 in year 1 and grow at 20% per annum for 3 years. Firm S's cash flows also start with $500 in year 1 but shrink at 20% per annum for 3 years.

What are the prices of these two firms? Which one is the better "buy"?

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Financial Management, Finance

Category:- Financial Management
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