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Present Value

You invest $1,000 today and expect to sell your investment for $2,000 in 10 years.
a. Is this a good deal if the discount rate is 6%?
b. What if the discount rate is 10%?

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a. Is this a good deal if the discount rate is 6%?

To make the decision, we need to find the present value of the investment. ...

Solution Summary

The solution explains the use of present value in evaluating investment decision.

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