Question

You are thinking about investing $5,000 in your​ friend's landscaping business. Even though you know the...

You are thinking about investing

$5,000

in your​ friend's landscaping business. Even though you know the investment is risky and you​ can't be​ sure, you expect your investment to be worth

$5,724

next year. You notice that the rate for​ one-year Treasury bills is 1%.

​However, you feel that other investments of equal risk to your​ friend's landscape business offer an expected return of 11%

for the year. What should you​ do?

The present value of the return is

​$

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