Question
TAN is considering 3 cash flow:
Cash flow A: receive 90 million VND today and then receive 20 million VND every year for next
five years.
Cash flow B: receive 10 million VND every year, forever, starting today.
Cash flow C: pay 30 million every year for five years, with the first payment being next year, and
then subsequently receive 50 million VND every year for 20 years.
Know that discount rate is 8%. Which cash flow should TAN choose?
Cash flow A: receive 90 million VND today and then receive 20 million VND every year for next
five years.
Cash flow B: receive 10 million VND every year, forever, starting today.
Cash flow C: pay 30 million every year for five years, with the first payment being next year, and
then subsequently receive 50 million VND every year for 20 years.
Know that discount rate is 8%. Which cash flow should TAN choose?