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Dixie Dynamite Company is evaluating two methods of blowing up old building for commercial purposes over the next five years. Methosd one(implosion )is relatively low
Dixie Dynamite Company is evaluating two methods of blowing up old building for commercial purposes over the next five years. Methosd one(implosion )is relatively low in risk for this business and will carry a 12 percent discount rate . Method two (explosion) less expensive to perform but more dangerous ans will call for a higher discount rate of 16 percent . Either method will require an intial capital outlay of dollor 75.000 The inflows from projected business over the next five years are given next. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Calculate net present value for Method 1 and Method 2 Which method should be selected using net present value analysis
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