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34 Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is
34 Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $14,600 and will produce cash flows as follows: End of Investment Year A B 10 1 $9,400 $ points 2 9,400 0 3 9.400 28,2001 03/2045 The present value factors of $1 each year at 15% are: Book 1 0.8696 2 0.7561 3 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment A is: O $(21,463). $6,862. $(14,600). $18,542. $13,600
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