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Investment options A and B are equally risky and have identical initial costs. Each investment will produce cash inflows of $20,000. Option A will pay $8,000 the first year followed by four annual payments of $3,000 each. Option B will pay five annual payments, starting in 1 year, of $4,000 each. Which one of the following statements is correct given these two investment options? Assume a positive rate of return.A) Neither investment should be undertaken.B) Option A is the better investment.C) Option B has a higher net present value.D) Option B has a lower future value at Year 5.E) Both options are of equal value.
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