Question: 1 Present Value/Future Value - 2 points Consider the following projects: Project / Year A B 1 -100 100 100 2 100 -100 100 3

1 Present Value/Future Value - 2 points Consider the following projects:

1 Present Value/Future Value - 2 points Consider the following projects: Project / Year A B 1 -100 100 100 2 100 -100 100 3 100 100 -100 1. Compute the present value of each project (now is Year 0), assuming the interest rate is 5% with annual compounding. Which one would you choose? 2. Compute the future value of each project in year 3. 3. For each project describe the equivalent perpetuity with annual payment. Equivalent in a sense that it provides the same present value as a project

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