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 $14,300 and will produce cash flows as follows: End of Year Investment A B 1 $ 9,700 $ 0 2 9,700 0 3 9,700 29,100 The present value factors of $1 each year at 15% are: 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:

Multiple Choice

$19,133.

$14,800.

$(22,148).

$(14,300).

$7,847.