Business, 18.02.2020 18:04 Zaxx2974

You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true? 1. The present value of cash flows in Investment A is equal to the present value of cash flows in Investment B. 2. The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B. 3. The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B. 4. No comparison can be made - we need to know the cash flows to calculate the present value.

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