Fargo Industries uses the Net Present Value method to make investment decisions and requires a 15% return on all investments. The company is considering two different investments. Each requires an initial investment of $15,000 and will produce cash flows as follows:

Year 1 2 3

Investment A $8000 $8000 $80000

Investment B 0 0 $24000

Which of the following is NOT true concerning these investments?

A.The payback period for Investment A is shorter than that for Investment B.

B.Investment B carries higher risk than Investment A.

C.The net present value of these investments is the same.

D.The internal rate of return of Investment A exceeds that of Investment B.