Question: Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is

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 investment of $15,500 and will produce cash flows as follows: End of Year 1 23 2 3 Investment A B $ 8,500 $ 0 8,500 8,500 25,500 The present value factors of $1 each year at 15% are: 1 0.8696 2 0.7561 3 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832. The net present value (rounded to the nearest whole dollar) of Investment A is: Multiple Choice . $16,766. $(15,500). $10,000. $(19,408)
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