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Author Question: Tanner is choosing between two investment options. He can invest $500 now and get (guaranteed) $550 ... (Read 20 times)

aabwk4

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on: Jul 9, 2019
Tanner is choosing between two investment options.  He can invest $500 now and get  (guaranteed) $550 in one year, or invest $500 now and get (guaranteed) $531.40 back later today.  The risk-free rate is 3.5%.  Which investment should Tanner prefer?
◦ $531.40 later today, since $1 today is worth more than $1 in one year.
◦ $550 in one year, since it is $50 more than he invested rather than $31.40 more than he invested.
◦ Neither - both investments have a negative NPV.
◦ Tanner should be indifferent between the two investments, since both are equivalent to the same amount of cash today.
Fundamentals of Corporate Finance ¦ Berk, DeMarzo, Harford ¦ 2nd Edition
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Marked as best answer by aabwk4 on Jul 9, 2019

T4T

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Reply #1 on: Jul 9, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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aabwk4

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Reply #2 on: Jul 9, 2019
Thanks


T4T

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Reply #3 on: Jul 9, 2019
Welcome :)


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