MC Qu. 110 Alfarsi Industries uses the net... A tarsi Industries uses the net pr

Question

MC Qu. 110 Alfarsi Industries uses the net... A tarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The compar considering two different investments. Each require an initial investment of $14,000 and will produce cash flows as follows d of Year Investment $10,000 s . 10,000 3 10,000 30,000 The present value factors of $1 each year at 15% are: 10.8696 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 of Investment A is Multiple Choice 19725

Explanation / Answer

the net present value of investment A year cash PV factor PV 1 10,000 0.8696 8696 2 10,000 0.7561 7561 3 10,000 0.6575 6575 total present value 22832 less initial investment -14,000 Net present value 8832 answer

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