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Delta Airlines is evaluating two investment options: Option A requires an initial investment of $200,000 and generates cash inflows of $50,000 annually for 5 years.


Delta Airlines is evaluating two investment options:

Option A requires an initial investment of $200,000 and generates cash inflows of $50,000 annually for 5 years.

Option B requires an initial investment of $300,000 and generates cash inflows of $70,000 annually for 7 years.

Create a table comparing the net present value (NPV) of both options at discount rates of 8% and 10%.

Investment Option

Initial Investment

Cash Flows (annually)

Maturity (Years)

Discount Rate (%)

NPV (at 8%)

NPV (at 10%)

Option A

$200,000

$50,000

5

8



Option B

$300,000

$70,000

7

8



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