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Summing the PVs of the cash flows, I get 3552. I'm going to guess that your equation assumes the first payment comes at the end of the first period, not at the start of it. For this setup, that would put the "start" date of the instrument at t=3. Personally, I would just discount all the cash flows back to today, rather than once to a forward date and then ...


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Why don't you calculate the IRR of each investment? (aside from all the issues with IRR).



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