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Two investment opportunities are open to you: Investment 1 and Investment 2. Each has an initial cost of $10,000.

Assuming that you desire a 10 percent return on your initial investment, compute the net present value of the two alternatives and evaluate their relative attractiveness:

Investment 1

Investment 2

Cash Flows

Year

Cash Flows

Year

$5,000

1

$8,000

1

6,000

2

7,000

2

7,000

3

6,000

3

8,000

4

5,000

4

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92092609

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