Question
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 3,000 $ 6,000 2
Annual cash inflows that will arise from two competing investment projects are given below:
| Year | Investment A | Investment B |
|---|---|---|
| 1 | $ 3,000 | $ 6,000 |
| 2 | 4,000 | 5,000 |
| 3 | 5,000 | 4,000 |
| 4 | 6,000 | 3,000 |
| $ 18,000 | $ 18,000 |
The discount rate is 11%.
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) 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: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
8th edition
978-1118953815, 978-1118953907
