Alfarsi Industries Uses the Net Present Value Method to Make $$\begin{array} { | r | r | r | } \hline 1 & \$ 8,000 & \$ 0 \\\hline 2 & 8,000 & 0 \\\hline 3 & 8,000 & 24,000 \\\hline\end{array}$$

question 96

Multiple Choice

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 of Investment
Year A B
$$\begin{array} { | r | r | r | } \hline 1 & \$ 8,000 & \$ 0 \\\hline 2 & 8,000 & 0 \\\hline 3 & 8,000 & 24,000 \\\hline\end{array}$$ The present value factors of $1 each year at 15% are:
$\begin{array}{llcc} \text {1 } &0.8696\\ \text { 2} &0.7561\\ \text { 3 } &0.6575\\\end{array}$

The present value of an annuity of $1 for 3 years at 15% is 2.2832
The net present value of Investment B is:

• A) $780.
• B) $(15,780).
• C) $9,000.
• D) $39,797.
• E) $(5,918).

---

Definitions:

Operative Side

The specific side of the patient's body on which surgical intervention is performed.

Primary Prevention

Strategies and measures taken to prevent the onset of disease or injury before it occurs.

Yearly Mammography

An annual screening process using X-ray imaging to detect breast cancer in women, recommended to start at a certain age or for those at higher risk.

Prostate Specific Antigen (PSA)

A protein produced by cells of the prostate gland, elevated levels of which can indicate prostate cancer or other conditions.