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Alfarsi Industries uses the net present value method to make Investment decisions and requires a 15% annual return on all investments. The company is considering
Alfarsi Industries uses the net present value method to make Investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investinent of $15.000 and will produce cash flows as follows Investment End of Year 1 2 3 $ $8.ee 8,eee 3.ee 24.ee The present value factors of teach year at 15% are. 1 2 3 0.8696 8.7561 2.6575 The present value of an annuty of 1 for 3 years at 15% in 22832 Which Westment should stars choose Multiple Choice Only Investment A is acceptable. Only Investment B is acceptable. Both investments are acceptable, but A should be selected because it has the greater net present value Both investments are acceptable, but B should be selected because it has the greater net present value. Neither machine is acceptable
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