Investments in government securities

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Reference no: EM131051654

A superannuation fund can earn j1 = 10% p.a.with investments in government securities. Determine which of the following investments the fund should accept if the initial investment required is $100,000 in each case.

End of year net cash flow:

Project

Year 1

Year 2

Year 3

Year 4

Year

L

25000

25000

25000

25000

25000

M

10000

30000

40000

30000

10000

N

-80000

40000

50000

60000

70000

O

70000

50000

30000

0

-30000

Reference no: EM131051654

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