Question: 2 investment opportunities are open to you: Investment one & Investment two. Each has an initial cost of 10,000 dollars. Suppose that you desire a ten percent return on your initial investment, calculate the net present value of the two alternatives and evaluate their relative attractiveness:
|
Investment 1
|
Investment 2
|
|
CasFlows
|
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
|