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You Have Just Purchased an Investment That Generates the Cash

Question 113

Multiple Choice

You have just purchased an investment that generates the cash flows that are shown below. If you are able to invest your money at 5.75%, compounded annually, by how much is this investment better or worse than your next best investment worth today? 0 $(9,000)
1 $1,250
2 $1,585
3 $1,750
4 $2,225
5 $3,450


A) $1,260 better
B) $533 better
C) $(533) worse
D) $8,467 better

Correct Answer:

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