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Math/Econ help

Suppose that it is possible to invest in only one of the two different
projects: Project A requires an initial outlay of £1,000 and yields £1,200
in 4 years. Project B requires an outlay of £30,000 and yields £35,000
after 4 years. Which of these projects would you choose to invest in when
the market rate is 3% compounded annually?

(edited 4 months ago)

Reply 1

MindMax2000

Universities Forum Helper

Original post by Nice_100

Where you say in 4 years and after 4 years, do you mean they would pay out on the 4th year? This might affect the NPV calculations.

As we cannot give answers on TSR posts, we can only offer hints. Look at the discount rate at X year for the payout.