Question
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 3,000 $ 12,000 2
Annual cash inflows that will arise from two competing investment projects are given below:
Year Investment A Investment B 1 $ 3,000 $ 12,000 2 6,000 9,000 3 9,000 6,000 4 12,000 3,000 $ 30,000 $ 30,000
The discount rate is 18%.
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.
Required:
Compute the present value of the cash inflows for each investment.Each investment opportunity will require the same initial investment. (Round discount factor(s) to 3 decimal places.)
I tried to calculate and I got the first line was right. For the second year, I also keep going for annual 6000 multiply the present value factor from the table but I was wrong. Please help me explain it! Thank you very much!
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