4.4-2 Question Help Investment X and Investment Y are both growing perpetuities with initial cash flow...

 

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4.4-2 Question Help Investment X and Investment Y are both growing perpetuities with initial cash flow of $100. Both investments have the same interest rate (r) and cash flows. The present value of Investment X is $5,000, while the present value of Investment Y is $4,000. Which of the following is true? O A. Investment X has a higher growth rate than Investment Y. O B. Investment X has a lower growth rate than Investment Y. O C. The answer cannot be determined without knowing the interest rate for both investments. O D. With the same initial cash flow and the same interest rate, Investment X and Investment Y should have the same present value. 4.4-2 Question Help Investment X and Investment Y are both growing perpetuities with initial cash flow of $100. Both investments have the same interest rate (r) and cash flows. The present value of Investment X is $5,000, while the present value of Investment Y is $4,000. Which of the following is true? O A. Investment X has a higher growth rate than Investment Y. O B. Investment X has a lower growth rate than Investment Y. O C. The answer cannot be determined without knowing the interest rate for both investments. O D. With the same initial cash flow and the same interest rate, Investment X and Investment Y should have the same present value. 4.4-2 Question Help Investment X and Investment Y are both growing perpetuities with initial cash flow of $100. Both investments have the same interest rate (r) and cash flows. The present value of Investment X is $5,000, while the present value of Investment Y is $4,000. Which of the following is true? O A. Investment X has a higher growth rate than Investment Y. O B. Investment X has a lower growth rate than Investment Y. O C. The answer cannot be determined without knowing the interest rate for both investments. O D. With the same initial cash flow and the same interest rate, Investment X and Investment Y should have the same present value. 4.4-2 Question Help Investment X and Investment Y are both growing perpetuities with initial cash flow of $100. Both investments have the same interest rate (r) and cash flows. The present value of Investment X is $5,000, while the present value of Investment Y is $4,000. Which of the following is true? O A. Investment X has a higher growth rate than Investment Y. O B. Investment X has a lower growth rate than Investment Y. O C. The answer cannot be determined without knowing the interest rate for both investments. O D. With the same initial cash flow and the same interest rate, Investment X and Investment Y should have the same present value.

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Those investments which are having a higher net present value will always h... View the full answer