Question
Annual cash inflows from two competing investment projects are given below: Year Investment A Investment B 1 $ 9,000 $ 12,000 2 10,000 11,000 3
Annual cash inflows from two competing investment projects are given below:
| Year | Investment A | Investment B |
|---|---|---|
| 1 | $ 9,000 | $ 12,000 |
| 2 | 10,000 | 11,000 |
| 3 | 11,000 | 10,000 |
| 4 | 12,000 | 9,000 |
| $ 42,000 | $ 42,000 |
The discount rate is 6%.
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor using tables.
Required:
Compute the present value of the cash inflows for each investment.
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Financial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
5th Edition
9781118560952, 1118560957, 978-0470239803
