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Labeau Products, Limited, of Perth, Australia, has $12,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:
Labeau Products, Limited, of Perth, Australia, has $12,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Invest in Project Invest in Project X Y $ 12,000 Investment required. Annual cash inflows. Single cash inflow at the end of 6 years Life of the project The company's discount rate is 18%. Click here to view Exhibit 12B-1 and Exhibit 12B-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? $ 12,000 $ 5,000 Required 1 Required 2 Required 3 6 years Complete this question by entering your answers in the tabs below. $ 30,000 Required 2 > 6 years 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
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