9. Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment, $65,000. The firms required rate of return on investments is 10%.

YEAR INVESTMENT A INVESTMENT B

1 $10,000 $ 18,000

2 15,000 10,000

3 20,000 32,000

4 35,000 20,000

Total Cash Inflows $80,000 $80,000

Required:

1. Compute the Net Present Value of each investment.

(2) Which investment should be made, and explain why.