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 $15,600 and will produce cash flows as follows: End of Year 1 2 1 2 3 Investment A $ 8,600 8,600 8,600 The present value factors of $1 each year at 15% are: 0.8696 0.7561 0.6575 B 0 e 25,800 The present value of an annuity of $1 for 3 years at 15% is 2.2832. The net present value (rounded to the nearest whole dollar) of Investment A is:

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 $15,600 and will produce cash flows as follows: End of Year 1 2 1 2 3 Investment A $ 8,600 8,600 8,600 The present value factors of $1 each year at 15% are: 0.8696 0.7561 0.6575 B 0 e 25,800 The present value of an annuity of $1 for 3 years at 15% is 2.2832. The net present value (rounded to the nearest whole dollar) of Investment A is:

Principles of Accounting Volume 2

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ISBN:9781947172609

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Chapter11: Capital Budgeting Decisions

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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 $15,600 and will produce cash flows as follows:
End of Year
1
2
3
Investment
1
2
A
$ 8,600
3
B
8,600
0
8,600
25,800
The present value factors of $1 each year at 15% are:
$0
0.8696
0.7561
0.6575
The present value of an annuity of $1 for 3 years at 15% is 2.2832. The net present value (rounded to the nearest whole dollar) of Investment A is:

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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 requires an initial investment of $14,700 and will produce cash flows as follows: End of year Investment A Investment B 1 $9300 $0 2 $9300 $0 3 $9300 $27900 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 The net present value of Investment A is: (The answer is $6534 but I do not know how to get there)
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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 $14,700 and will produce cash flows as follows: End ofYear Investment A B 1 $ 9,300 $ 0 2 9,300 0 3 9,300 27,900 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 The net present value of Investment B is: Multiple Choice $(18,344). $8,679. $3,644. $46,244. $13,200
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 $15,400 and will produce cash flows as follows: End ofYear Investment A B 1 $ 8,400 $ 0 2 8,400 0 3 8,400 25,200 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 The net present value of Investment B is:
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