You are comparing two investment options that each pay 5 percent interest, compounded annually

You are comparing two investment options that each pay 5 percent interest, compounded annually. Both options will provide you with $12,000 of income. Option A pays three annual payments starting with $2,000 the first year followed by two annual payments of $5,000 each. Option B pays three annual payments of $4,000 each. Which one of the following statements is correct given these two investment options?    A.  Both options are of equal value given that they both provide $12,000 of income. B.  Option A has the higher future value at the end of year three. C.  Option B has a higher present value at time zero than does option A. D.  Option B is a perpetuity. E.  Option A is an annuity. Refer to sections 6.1 and 6.2

13.

You are considering two projects with the following cash flows:     Which of the following statements are true concerning these two projects? I. Both projects have the same future value at the end of year 4, given a positive rate of return. II. Both projects have the same future value given a zero rate of return. III. Project X has a higher present value than Project Y, given a positive discount rate. IV. Project Y has a higher present value than Project X, given a positive discount rate.    A.  II only B.  I and III only C.  II and III only D.  II and IV only E.  I, II, and IV only Refer to section 6.1

14.

Which one of the following statements is correct given the following two sets of project cash flows?        A.  The cash flows for Project B are an annuity, but those of Project A are not. B.  Both sets of cash flows have equal present values as of time zero given a positive discount rate. C.  The present value at time zero of the final cash flow for Project A will be discounted using an exponent of three. D.  The present value of Project A cannot be computed because the second cash flow is equal to zero. E.  As long as the discount rate is positive, Project B will always be worth less today than will Project A. Refer to section 6.1