(Answered) You are considering two alternate investments the

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You are considering two alternate investments. The perpetuity, which costs $600,000, pays an equivalent salary of $60,000 per year, in perpetuity, from your retirement in 5 years time, while the uneven cash flow investment costs $400,000 and pays the following cash flows at the end of years 2 to 7:

Yr 2: $80,000, Yr 3: $90,000, Yr 4: $100,000, Yr 5: $110,000, Yr 6: $120,000 and Yr 7: $130,000.

Which investment is a good choice

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