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Keller Construction is considering two new investments Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic ift.
Keller Construction is considering two new investments Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic ift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approadmate answer but calculate your final answer using the formula and financial calculator methods. Project Project $22, Inventent) (521,000 Investment) Tear Cash Flow Year La lan 1 1 $15.0DD 2 1,000 2 6,000 3 5,000 4 11,000 a. Determine the net present value of the projects based on a zero percent discount rate. Project E Project Net Present Value $ 32,000 $ 26,000 b. Determine the net present value of the projects based on a discount rate of 10 percent. (Do not round Intermediate calculations and round your answers to 2 decimal places.) Net Present Value Project E Project H c. If the projects are not mutually exclusive, which projects) would you accept if the discount rate is 10 percent? Project E O Project O Both Hand E
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