You are choosing between two investments of equal risk. You believe that given the risk, the appropriate
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Question:
You are choosing between two investments of equal risk. You believe that given the risk, the appropriate discount rate to use is 9%. Your initial investment (outflow) for each is $500. One investment is expected to pay out $1,000 three years from now; the other investment is expected to pay out $1,350 five years from now. To choose between the two investments, you must compare the value of each investment at the same point in time.
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