Exercise 14-14 (Algo) Comparison of Projects Using Net Present Value (LO14-2] Labeau Products, Ltd., of Perth, Australia, has $15,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project Invest Invest in in Project Project $ 15,000 $15,000 $ 5,000 $ 36,000 6 years 6 years The company's discount rate is 16%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Comnute the net recent value nf Prniert X Nenative amounts should ha indicated hw a minus cinn Round Vaur final ancwer Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project in in Project Project Y $ 15,000 $ 15,000 $ 5,000 $36,000 6 years 6 years The company's discount rate is 16% Click here to view Exhibit 148-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the net present value of Project X. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.) Net present value Required 1 Required 2 > Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project in in Project Project Y $ 15,000 $15,000 $ 5,000 $36,000 6 years 6 years The company's discount rate is 16% Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the net present value of Project Y. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.) Net present value
