Let’s assume that you have GBP100 to invest, and have two strategies from which to choose with the following cash flow streams as shown in Exhibit 9. 

Your required return for both investment strategies is 10 percent per time period. 

1. Recommend which investment strategy to choose. 

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Exhibit 9: Two Investment Strategies Strategy 1.) Time GBP100 Strategy 2.) GBP100 t=0 t=1 CF(1),: GBP45 + t=2 t=3 CF(1)2: GBP45 CF(1): GBP45 CF(2),: GBP60 CF(2)2: GBP40 CF(2): GBP32.35