The Vortex Corp. has an opportunity to invest $1,500,000 in investment A or in investment B. Investment A promises to pay $500,000 profit at the end of the first year, $550,000 at the end of two years, $600,000 at the end of three years, and $625,000 at the end of four years. Investment B promises to pay $25,000 profit at the end of the first year, $100,000 at the end of two years, $600,000 at the end of the third year, and $1,000,000 at the end of four years. Assume that nine percent per year is an appropriate discount rate for each investment. Also, assume a zero scrap value for each investment at the end of four years. Determine which investment promises to be the better of the two for the company.

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The Answer of The Vortex Corp. has an opportunity to invest $1,500,000 in investment A or in investment B. Investment A promises to pay $500,000 profit at the end of the first year, $550,000 at the end of two years, $600,000 at the end of three years, and $625,000 at the end of four years. Investment B promises to pay $25,000 profit at the end of the first year, $100,000 at the end of two years, $600,000 at the end of the third year, and $1,000,000 at the end of four years. Assume that nine percent per year is an appropriate discount rate for each investment. Also, assume a zero scrap value for each investment at the end of four years. Determine which investment promises to be the better of the two for the company.