Your client wishes to assess whether the following investments are satisfactory. His required return (discount rate) of 17% to evaluate each investment.

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

Required:

Make an investment recommendation to your client using Net Present Values