All other things being equal, which of the following would be the most attractive to an investor?
A) A cash inflow of $10,000 in five years.
B) A cash inflow of $2,000 each year for the next five years.
C) A cash inflow of $5,000 in year 1 and $5,000 in year 5.
D) A cash inflow of $10,000 today.
E) All of these would be equally attractive to an investor.

Question

Quizplus · Accepted Answer

The most attractive option for an investor, all other things being equal, is a cash inflow of $10,000 today (Option D). This is because of the time value of money principle, which states that a dollar today is worth more than a dollar in the future due to its potential earning capacity.

All Other Things Being Equal, Which of the Following Would