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Jaime is planning to sell his car, truck, and van. He expects to sell each of...

Jaime is planning to sell his car, truck, and van. He expects to sell each of the three vehicles for the same, positive cash flow of $A. Jaime expects to sell the car in W years, the Truck in Wyears, and the van in T years. The cost of capital for the car is Y percent, the cost of capital for the truck is Y percent, and the cost of capital for the van is X percent.

We know that T > W > 0 and X > Y > 0. The cash flows from the sales are the only cash flows associated with the various vehicles. Based on this information only, which one of the following assertions is true?

A.

Answer is not listed or is not possible
B.

The car is the most valuable vehicle.
C.

The truck is the most valuable vehicle.
D.

The van is the most valuable vehicle.
E.

Two of the vehicles will have the same value and it will be greater than the third vehicle.
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Answer #1

D. The Van is the most Valuable Vehicle.
This assertion is true as Cost of capital & Time period is higher than that of the other two vehicles.

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