The following investments are available. All cash flows occur at the end of the

Question

The following investments are available. All cash flows occur at the end of the respective years.
1. Pays $2,400 per year for 3 years. The rate of return expected by investors is 5%.
2. Pays $300 the 1st year, zero the second year and $6,900 and the 3rd year. Investors expect a 3% rate of return.
3. Pays $3,600 the first year, $18,00 the third year. Investors expect a 10% rate of return.

which investment opportunity has the highest investment
a. investment 1
b. investment 2
c. investment 3
d. all of the above

Explanation / Answer

Investment 3 has highest investment proposal because it have good returns so option C

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