Tompkins Company has two investment opportunities. Both investments cost $5,000 and will provide the same total future cash inflows. The cash receipt schedule for each investment is given below:

Select the correct statement.

Multiple Choice

• Time value of money techniques are not useful for comparing these investments.

• Tompkins should choose Investment II because it generates more immediate cash inflows.

• Tompkins should choose Investment I because of the time value of money.

• Tompkins should be indifferent between the two investments because they provide the same total cash inflows.