Hsu, Inc. is considering two investment opportunities. Each investment costs $9,000 and will provide the same total future cash inflows. The schedule of estimated cash receipts for each investment follows (assume cash is received at year-end):

Investment I Investment II

Year 1 $3,000 $1,000

Year 2 2,500 2,000

Year 3 2,000 3,000

Year 4 1,500 3,000

Total $9,000 $9,000

21. Which investment should Hsu choose, assuming all other features for the two investments are the same?

		a. Hsu should be indifferent between the two investments because they provide the same total cash inflows.
		b. Hsu should choose Investment I because of the time value of money.
		c. Hsu should be indifferent between the two investments because the initial cash outflow is the same.
		d. Hsu should choose Investment II because it generates larger cash inflows at the end of the investments useful life.

22. Assuming an 8 percent minimum rate of return, what is the net present value of Investment II (round to the nearest whole dollar)?