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Business, 02.08.2019 23:10 gigi239

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 ofyearinvestmentab1$8,000 $0 2 8,000 0 3 8,000 24,000 the present value factors of $1 each year at 15% are: 10.869620.756130.6575 the present value of an annuity of $1 for 3 years at 15% is 2.2832 which investment should alfarsi choose? multiple choiceboth investments are acceptable, but a should be selected because it has the greater net present value. only investment b is acceptable. both investments are acceptable, but b should be selected because it has the greater net present value. neither machine is acceptable.

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