Business, 17.12.2019 01:31, ericgideon

Exercise 13-14 comparison of projects using net present value [lo13-2] labeau products, ltd., of perth, australia, has $11,000 to invest. the company is trying to decide between two alternative uses for the funds as follows:

invest in project x invest in project y
investment required $ 11,000 $ 11,000
annual cash inflows $ 4,000
single cash inflow at the end of 6 years $ 25,000
life of the project 6 years
the company’s discount rate is 15%.

(a) compute the net present value of project x.
(b) compute the net present value of project y.
(c) which project would you recommend the company accept?

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Exercise 13-14 comparison of projects using net present value [lo13-2] labeau products, ltd., of per...