Question
Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment. Investment X Investment Y Year
| Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment. |
| Investment X | Investment Y | |||
| Year 1 | $ | 7,000 | $ | 10,000 |
| Year 2 | 8,000 | 9,000 | ||
| Year 3 | 9,000 | 8,000 | ||
| Year 4 | 10,000 | 7,000 | ||
| Total | $ | 34,000 | $ | 34,000 |
| Click here to view Exhibit 11B-1, to determine the appropriate discount factor(s) using tables. |
| Required: |
| Compute the present value of the cash inflows for each investment using a 13% discount rate. (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.) |
| Present Value of Cash Flows | |
| Investment X | $ |
| Investment Y | $ |
| | |
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Management Accounting
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Susan Wolcott
2nd Edition
1742166148, 978-1742166148
