Net present value is being used to break the tie among four otherwise equal projects. If the interest rate is 4%, which of these anticipated four-year flows would yield the greatest net present value?
A. $10,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $13,000 in year 4
B. $13,000 in year 1; $12,000 in year 2; $11,000 in year 3; and $10,000 in year 4
C. $10,000 in year 1; $10,000 in year 2; $13,000 in year 3; and $13,000 in year 4
D. $11,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $12,000 in year 4
Answer:B
Net present value is being used to break the tie among four otherwise equal projects. If the interest rate is 4%, which of these anticipated four-year flows would yield the greatest net present value?
A. $10,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $13,000 in year 4 B. $13,000 in year 1; $12,000 in year 2; $11,000 in year 3; and $10,000 in year 4 C. $10,000 in year 1; $10,000 in year 2; $13,000 in year 3; and $13,000 in year 4 D. $11,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $12,000 in year 4