Mrs Shafi has to choose the better of two equally costly cash flow streams, annuity A and
annuity B. Annuity A is an annuity due with a cash inflow of Rs. 9,000 for each of 6 years. Annuity B is an ordinary annuity with a cash inflow of Rs. 10,000 for each of 6 years. Assume that Mrs Shafi can earn 15 percent on her investments.
Help Mrs Shafi to decide which annuity is more better for her and why?
Note: (Calculations are not required.Do your calculations in rough work and support your answer in just one line.)
annuity B. Annuity A is an annuity due with a cash inflow of Rs. 9,000 for each of 6 years. Annuity B is an ordinary annuity with a cash inflow of Rs. 10,000 for each of 6 years. Assume that Mrs Shafi can earn 15 percent on her investments.
Help Mrs Shafi to decide which annuity is more better for her and why?
Note: (Calculations are not required.Do your calculations in rough work and support your answer in just one line.)
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