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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
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 $15,300 and will produce cash flows as follows: End of Year 1 2 3 Investment A B $8,300 $ 0 8,300 8,300 24,900 The present value factors of $1 each year at 15% are: 1 2 0.8696 0.7561 0.6575 w The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment B is: Multiple Choice $6,312 $1,072 $(16,372). $41,272 $9.600
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