X:
Present value of inflows=$6000*Present value of annuity factor(14%,6)
=$6000*3.888
=$23,332.01(Approx).
Hence NPV=
Present value of inflows-Present value of outflow
=$23,332.01-$19000
=$4332.01(approx).
Y:
Present value of inflow=$40,000*Present value of discounting factor(14%,6)
=$40000*(0.4555)
=$18,223.46(Approx).
Hence NPV=$18,223.46-$19000
-$776.54(Approx)(Negative NPV).
Labeau Products, Ltd., of Perth, Australia, has $19,000 to invest. The company is trying to decide...
Labeau Products, Ltd., of Perth, Australia, has $18,000 to invest. The company is trying to decide between two altemative uses for the funds as follows: Invest in Invest in Pro $18,000 18,000 $ 7,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project $ 41,000 6 years 6 years The company's discount rate is 17%. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using...
Labeau Products, Ltd. of Perth. Australia, has $23,000 to invest. The company is trying to decide between two alternative using for the funds as follows: The company's discount rate is 16%. Determine the net present values (Any cash outflows should be indicated by a minus sign. Use the appropriate table to determine the discount factor(s).)
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