Investment A B Purchase Price $13,000 $8,500 End of Year Income Stream 1 $2,500 $4,000 2 $3,500 $3,500 3 $4,500 $3,000 4 $5,000 $1,000 5 $5,500 $500

Kent Weitz wishes to assess whether the following investments are satisfactory: LOADING... . Use his required return (discount rate) 17% to evaluate each investment. Make an investment recommendation to Kent.

The present value, PV , at the required rate of 17 % for Income Stream A is $nothing. (Round to the nearest cent.)

The recommendation to Kent for Investment A is: (Select the best answer below.)

A. The present value (at 17% required return) of the income from Investment A, at $ 12,680.08, is less than the $13,000 purchase price. Investment A should not be purchased. Kent will earn less than his required rate of return.

B. The present value (at 17% required return) of the income from Investment A, at $ 12,680.08, is less than the $13,000 purchase price. Investment A should be purchased. Kent will earn more than his required rate of return.

The present value, PV , at the required rate of 17 % for Income Stream B is $nothing. (Round to the nearest cent.)

The recommendation to Kent for Investment B is: (Select the best answer below.)

A. The present value (at 17% required return) of the income from Investment B, at $8,610.42 , is greater than the $8,500 purchase price. Investment B should not be purchased. Kent will earn less than his required rate of return.

B. The present value (at 17% required return) of the income from Investment B, at $8,610.42 , is greater than the $8,500 purchase price. Investment B should be purchased. Kent will earn more than his required rate of return.