Question: Alfarsi industries uses the net present value method to make investment decisions and requires a 15% annual retum on all investments. The company is considering
Alfarsi industries uses the net present value method to make investment decisions and requires a 15% annual retum on all investments. The company is considering two different investments. Each require an initial investment of $15,400 and will produce cash flows as follows End of Tear I 2 $0 0 25,200 The present value factors of $1 each year at 15% are 1 Multiple Choice Investment 0.0696 0.7561 3 0.6575 The present value of an annulty of $1 for 3 years at 15% is 2.2832. The net present value (rounded to the nearest whole dollar) of investment Ais $9,000 #0,400 8,400 $(19,180)
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