A rational person would prefer receiving cash flows sooner because
Consider cash flows for Projects X and Y such as:
Project X Project Y
Year 1 $3000 $ 0
Year 2 $ 0 $3000
A) the money can be reinvested.
B) the money is nice to have around.
C) the investor may be tired of a particular investment.
D) the investor is indifferent to either proposal.
Answer: A
Business
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Fill in the blank(s) with the appropriate word(s).
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How much must be deposited today in an account earning 4% annually to accumulate a 15% down payment to use in purchasing a car one year from now, assuming that the car's current price is $30,000, and inflation will be 2%?
a. $4,327 b. $4,351 c. $4,413 d. $4,545
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