Answer:
The net present values of the two investments are $46000 and $55000 respectively .
However, the present value index for the first investment is 1.40 while the second investment has 1.2 as net present value index.
Judging from net present value,the the second investment is preferable,but since net present value is an absolute value,it does not relate the net present value to the underlying outlay,the first investment is preferred based on present value of index 1.4
Explanation:
The net present value for both alternatives is shown below:
$ $
Present value of cash inflows 160000 335000
Present value of cash inflows (114000) (280000)
Net present value 46000 55000
Present value index=present value of inflows/present value of outflows
First investment =160000/114000=1.40
Second investment =335000/280000=1.2
If the financial markets are efficient, then investors should expect their investments in those markets to Market efficiency. The Market efficiency refers to how well current prices reflect all available, relevant information about the underlying assets' actual value. Because any information is useless in a truly efficient market, beating the market is impossible.
If the New York Stock Exchange is a well-functioning market, Company ABC's share price accurately reflects all available information about the Market. As a result, all NYSE participants could predict that Company ABC would release the new product. As a result, the company's stock price remains unchanged.
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Answer:
E. Both C and D would be good advice for Mary is the correct answer.
Explanation: