Consider the following cash flows:
X: $1,000 in two years
Y: $500 in one year AND $500 in two years
Z: $1,000 in one year
Which is the correct ordering of their relative present values?
a) X > Y > Z
b) X = Y = Z
c) Z > Y > X
d) Y > X = Z
e) X = Z > Y
Ans: c) Z > Y > X
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