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Hi, I want you to solve these two questions based on my lecture notes please. I have attached you the lecture notes and here is the questions : Q1.If Marjorie Lychee had the choice of the following...

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Hi, I want you to solve these two questions based on my lecture notes please. I have attached you the lecture notes and here is the questions :

Q1.If Marjorie Lychee had the choice of the following cash flows given anopportunity cost of 10%;

cash flow A : $3,088.50 today, or

cash flow B : $3,300 in 1 years time, or

cash flow C : $814.74 at the end of each year for 5 years,

which of the alternatives should clearly be selected? Please show the workings .

A.cash flow A

B.cash flow B

C.cash flow C

D.either cash flow A or cash flow C

Q2Financial advisers usually recommend to clients that it is important that they consider diversifying investments within and across asset classes. Explain what this means and why it is important ?

I want the work to be done within the next 24 hours please

Thanx

Answered Same Day Dec 23, 2021

Solution

David answered on Dec 23 2021
129 Votes
Particulars
Yea
Amount ($)
P.V.
facto
@
10% P.V.

Cash
flow A
Cash
flow B
Cash
flow C
Cash
flow A
Cash
flow B
Cash
flow C
Annual cash
flows 0 3088.5
1.000
3,088.50
-
-
1 3300 814.74
0.909
-
3,000.00
740.673
2 814.74
0.826
-
-
673.339
3 814.74
0.751
-
-
612.126
4 814.74
0.683
-
-
556.478
5 814.74
0.621
-
-
505.889
TOTAL
3,088.50
3,000.00
3,088.51
Comment: - Alternative C should be selected as it is highest cash flowing option out of the
given...
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