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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

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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 $15,000 and will produce cash flows as follows: End of Year 1 2 Investment A $8,000 $ 8,000 0 8,000 24,000 The present value factors of $1 each year at 15% are: 1 2 8.8696 0.7561 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 Which investment should Alfarsi choose? Which investment should Alfarsi choose? Only Investment A is acceptable. Only Investment B is acceptable. Both investments are acceptable, but A should be selected because it has the greater net present value. Both investments are acceptable, but B should be selected because it has the greater net present value. O Neither machine is acceptable

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