Homework Clinic
Social Science Clinic => Economics => Microeconomics => Topic started by: najmarocks25 on Oct 12, 2022
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The table below shows the payments at the end of each year from three different physical assets.
| Asset | Year 1 | Year 2 | Year 3 |
| A | $1000 | $1000 | $1000 |
| B | $0 | $1000 | $2000 |
| C | $0 | $0 | $3000 |
| Interest Rate | 5% | 5% | 5% |
TABLE 15-1
Refer to Table 15-1. A, B, and C represent possible purchases of physical capital, each offering a stream of payments as indicated in the table. There are no payments beyond Year 3. The interest rates in each year are also specified in the table. What is the present value (at the beginning of Year 1) of asset B?
◦ $2634.70
◦ $2722.97
◦ $3150
◦ $3000
◦ $2590.67
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$2634.70
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