Could you please help me to solve it? sincerly, thank you please draw the cash flow as line

Question

Question

could you please help me to solve it?

sincerly, thank you

please draw the cash flow as line

Answer 1

Answer #1

Present Value = Future value/ ((1+r)^t)
where r is the interest rate that is 5% and t is the time period in years.
Net present value (NPV) = (sum of present value of future cash flows) - initial investment

Investment A
Year	0	1	2
cash flow	-10000		11500
present value			10430.84
NPV	430.839

Investment B
Year	0	1	2	3	4	5
cash flow	-8000				4500	4500
present value					3702.161	3525.868
NPV	-771.971

Alternative A is preferred if an interest rate of 5% is used.

Answer 2

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