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Problem $7-08$

A company has two investment possibilities, with the following cash inflows:

Investment Year $1$ Year $2$ Year $3$

A $$1,5001,9002,100$

B $$1,4001,4001,400$

If the firm can earn $6$ percent in other investments, what is the present value of investments A and B$?$ Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.

PV$($Investment A$)$: $

PV$($Investment B$)$: $

If each investment costs $$4,000,$ is the present value of each investment greater than the cost of the investment?

The present value of investment A is

$-$Select$-$

the cost.

The present value of investment B is

$-$Select$-$

the cost.