Emily has $100,000 that she wants to invest and is considering the following options:

• Option A: Investment in Redbird Mutual Fund, which is expected to produce interest income of $8,000 per years.
• Option B: Investment in Cardinal Partnership (buys, sells, and operates wine vineyards). Emilys share of the partnerships ordinary income and loss over the next 3 years would be as follows. Year 1 had an $8,000 loss, year 2 had $2,000 lost, and year 3 had a $34,000 income.

Emily is interested in the after-tax effects of these alternatives over a three-year horizon. Assume that Emilys investment portfolio produces ample passive income to offset any passive losses that may be generated. Her lost of capital is 8% (the present value factors are .92593, .85734, and .79383), and she is in the 28% tax bracket. The two investment alternatives possess equal growth potential and comparable financial risk. Based on these facts, compute the present value of these two investment alternatives and determine which option Emily should choose.

If you could please explain your answer in a simply and logically manner, thank would be great. Thank you.