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 $15,000 and will produce cash flows as follows:

End of Year	Investment
	A			B
1	$	8,000		$	0
2		8,000			0
3		8,000			24,000

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 Which investment should Alfarsi choose?

Multiple Choice

A $2.80 cost per unit.

B $7.80 savings per unit.

C $0 cost or savings per unit.

D$7.80 cost per unit.

E $2.80 savings per unit.