Alfarsi Industries Uses the Net Present Value Method to Make

question 92

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: The present value factors of $1 each year at 15% are:
The present value of an annuity of $1 for 3 years at 15% is 2.2832
Which investment should Alfarsi choose?

• A) Only Investment A is acceptable.
• B) Only Investment B is acceptable.
• C) Both investments are acceptable, but A should be selected because it has the greater net present value.
• D) Both investments are acceptable, but B should be selected because it has the greater net present value.
• E) Neither machine is acceptable.

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Definitions:

Microevolution

Change in allele frequency.

Independent Assortment

A basic principle of genetics developed by Mendel stating that genes for different traits are sorted separately from one another so the inheritance of one trait is not dependent on the inheritance of another.

Crossing Over

Process by which homologous chromosomes exchange corresponding segments of DNA during prophase I of meiosis.

Sexual Selection

A mode of natural selection where individuals with certain inherited traits are more likely to find a mate and reproduce, often leading to the evolution of traits that enhance mating success.