Question
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 8,000 $ 11,000 2
Annual cash inflows that will arise from two competing investment projects are given below:
| Year | Investment A | Investment B |
|---|---|---|
| 1 | $ 8,000 | $ 11,000 |
| 2 | 9,000 | 10,000 |
| 3 | 10,000 | 9,000 |
| 4 | 11,000 | 8,000 |
| $ 38,000 | $ 38,000 |
The discount rate is 7%.
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.
Required:
Compute the present value of the cash inflows for each investment.
| Year | Present Value of Cash Flows for Investment A | Present Value of Cash Flows for Investment B |
|---|---|---|
| 1 | ||
| 2 | ||
| 3 | ||
| 4 | ||
| Total |
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Financial Accounting
Authors: John Stittle, Robert Wearing
1st Edition
1412935024, 9781412935029
