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Offered two investment opportunities

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You are offered two investment opportunities with the following cash flow starting from a year today.

Year 1 Year 2 Year 3 Year 4
A 1,800 2,600 2,000 1,850
B 1,200 2,200 1,800 1,900

You can get A at a cost of C and B at a cost of C+100 at time 0 (today). The value of option A is twice as much as option B to you today. If your alternative is earning 6% annually in the market, what is C ?

Reference no: EM132622312

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