Question
A & B Enterprises is trying to select the best investment from the following alternatives. Each investment has an initial cost of $100,000. Machine Cost
A & B Enterprises is trying to select the best investment from the following alternatives. Each investment has an initial cost of $100,000.
| Machine Cost | A: $100,000 | B: $100,000 | C: $100,000 |
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| Cash Inflows Each Year: |
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| Year 1 | $ 10,000 | $ 50,000 | $ 0 |
| Year 2 | $ 20,000 | $ 40,000 | $ 0 |
| Year 3 | $ 30,000 | $ 30,000 | $ 45,000 |
| Year 4 | $ 40,000 | 0 | $ 55,000 |
| Year 5 | $ 50,000 | 0 | $ 60,000 |
SOLVE FOR THE NET PRESENT VALUE FOR EACH PROJECT USING A DISCOUNT RATE OF 10%.
Answer 1: NPV for Project A =
Answer 2: NPV for Project B =
Answer 3: NPV for Project C =
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Numerical Methods In Finance
Authors: René Carmona, Pierre Del Moral, Peng Hu, Nadia Oudjane
2012th Edition
3642257453, 978-3642257452
