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 ofYearInvestment?AB1$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.The net present value of Investment A is:
A. $9,000.
B. $(15,000).
C. $3,266.
D. $(20,549).
E. $18,266.
Answer: C
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