Question
A developer is considering two projects. Project A has a capital cost of $1,230,000 and a life of 20 years. Income for the project will
A developer is considering two projects.
Project A has a capital cost of $1,230,000 and a life of 20 years. Income for the project will be $355,000 per year. At the end of 20 years the project can be sold for $450,000. The project's discount rate is 16%.
What is the Net Present Value for Project A? (Answer to the nearest dollar)____________
Project B has a capital cost of $870,000 and a life of 18 years. Income for the project will be $145,000 per year. At the end of 18 years the project can be sold for $250,000. The project's discount rate is 17%.
What is the Net Present Value for Project B? (Answer to the nearest dollar) ____________
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Business Forecasting
Authors: John E. Hanke, Dean Wichern
9th edition
132301202, 978-0132301206
