A company is considering two investment options: Option A requires an initial investment of $50,000 and generates a cash flow of $15,000, $20,000, $25,000, $30,000, and $35,000 over the next five years. Option B requires an initial investment of $40,000 and generates a cash flow of $17,000, $18,000, $19,000, $20,000, and $21,000 over the next five years. The company has a required rate of return of 8%. Which option should the company choose based on the net present value (NPV) method?

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The net present value NPV method is use... View the full answer