# Question: Two investments offer a series of cash payments over the

Two investments offer a series of cash payments over the next 4 years, as shown in the following table:

a. What is the total amount of money paid by each investment over the 4 years?

b. From a time value of money perspective, which of these investments is more attractive?

c. Can you think of a reason why investors might prefer Investment 1?

a. What is the total amount of money paid by each investment over the 4 years?

b. From a time value of money perspective, which of these investments is more attractive?

c. Can you think of a reason why investors might prefer Investment 1?

**View Solution:**## Answer to relevant Questions

How much would an investor earn on a stock purchased 1 year ago for $45 if it paid an annual cash dividend of $2.25 and had just been sold for $52.50? Would the investor have experienced a capital gain? Explain. Use a financial calculator or an Excel spreadsheet to estimate the yield each of the following investments. A company reported net income in 2009 of $350 million. In 2013 the company expects net income to be $441.7 million. Estimate the annual compound growth rate of net income. Calculate the holding period return for the following two investment alternatives. Which, if any, of the return components is likely not to be realized if you continue to hold each of the investments beyond 1 year? Which ...For each of the savings account transactions in the accompanying table on page 163, calculate the following. a. End-of-year account balance. (Assume that the account balance at December 31, 2013, is 0.) b. Annual interest, ...Post your question