A firm has three different investment options. Option A will give the firm $10 million at the end of one year, $10
million at the end of two years, and $10 million at the end of three years. Option B will give the firm $15 million at
the end of one year, $10 million at the end of two years, and $5 million at the end of three years. Option C will give
the firm $30 million at the end of one year, and nothing thereafter. Which of these options has the highest present
value?
a.Option A
b.Option B
c. Option C
d.The answer depends on the rate of interest.