Question

Firm has three different investment options, each costing $10 million. option a will generate $12 million in revenue at the end of one year. option b will generate $15 million in revenue at the end of two years. option c will generate $18 million in revenue at the end of three years. which option should the firm choose?

Answer 1

option a in order to get highest profit a year
a: 12 million a year
b: 15 ÷ 2 = 7.5 million a year
c: 18 ÷ 3 = 6 million a year.
to get most revenue, option a is the best choice