Your company, which has a marr of 12%, is considering the following two investment alternatives:
- project a project b
initial capital investment $40,000 $60,000
revenues $15,000 per year, $24,000 per year
starting in year 3 starting in year 4
expenses $3,000 per year $3,000 per year
salvage value $4,000 $9,000
project life 10 years 10 years
a) find the future worth of project a and project b.
b) determine which project, if any, your company should choose.
c) find the irr of project a.
Answers: 1
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Your company, which has a marr of 12%, is considering the following two investment alternatives:
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