Steve Is Offered An Investment Where For Every 1 00 Invested Today He Will Recei

Steve is offered an investment where for every $1.00 invested today, he will receive $1.10 at the end of each of the next five years. steve concludes that in five years he will have $1.10 for every $1.00 invested and that this investment will increase his personal value. what is steve’s major error in reasoning when making this decision? he ignores the benefits of consuming the $1.00 today against the benefits of consuming the $1.00 five years from now. he ignores the fact that the costs and benefits of the investment are not stated in the same terms. he considers that the value of the cash he may have in the future is the same as the value of cash he has today. he fails to consider the costs of not consuming the $1.00 today.

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