Project A requires an original investment of $125,000 The project will yield cash flows of $24,000 per year for nine years Project B has a calculated net present value of $2,400 over a six year life Project A could be sold at the end of six years for a price of $60,000 (a) Determine the net present...

a b Project A Project As net present value of 4984 is more than the n ...

Project A requires an original investment of $125,000. The project will yield cash flows of $24,000 per

Question:

Project A requires an original investment of $125,000. The project will yield cash flows of $24,000 per year for nine years. Project B has a calculated of $2,400 over a six-year life. Project A could be sold at the end of six years for a price of $60,000.
(a) Determine the of Project A over a six-year life with residual value, assuming a minimum rate of return of 12%.
(b) Which project provides the greatest ?

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...