A firm has three different investment options,each costing $10 million.Option A will generate $12 million in revenue at the end of one year.Option B will generate $15 million in revenue at the end of two years.Option C will generate $18 million in revenue at the end of three years.Which option should the firm choose?
A)Option A
B)Option B
C)Option C
D)The answer depends on the rate of interest,which is not specified here.

Question

Quizplus · Accepted Answer

The best investment option depends on the present value of future cash flows, which requires knowing the rate of interest to discount future revenues. Without this information, we cannot determine which option is best.

A Firm Has Three Different Investment Options,each Costing $10 Million