Question

Present value of annuities and complex cash flows​)

You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows:

Assuming an annual discount rate of 20 % find the present value of each investment.

Investment Alternatives
End of Year	A		B		C
1	​$	10,000			​$	10,000
2		10,000
3		10,000
4		10,000
5		10,000	​$	10,000
6				10,000		50,000
7				10,000
8				10,000
9				10,000
10				10,000		10,000

Answer 1