Question
Copy of XYZ Corporation is faced with twomutually exclusive investmentopportunities.The cost of capital is 12 percent.The cash flows for the two projects are: Project A
Copy of
XYZ Corporation is faced with twomutually exclusive investmentopportunities.The cost of capital is 12 percent.The cash flows for the two projects are:
Project A Project B
Year Cash Flow Cash Flow
0 -$140,000 -$100,000
1 60,000 30,000
2 60,000 30,000
3 60,000 30,000
4 30,000
5 30,000
6 30,000
What is the NPV for each investments UNDER THE REPLACEMENT APPROACH?
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Financial and Management Accounting
Authors: Pauline Weetman
7th edition
1292086599, 978-1292086590
