Labeau Products, Ltd., of Perth, Australia, has $19,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:

	Invest in Project X		Invest in Project Y
Investment required	$	19,000	$	19,000
Annual cash inflows	$	6,000
Single cash inflow at the end of 6 years			$	40,000
Life of the project	6 years		6 years

The companys discount rate is 14%.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Required:

a.

Determine the net present values. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)

	Now	1	2	3	4	5	6
Project X:
Initial investment
Annual cash inflows
Total cash flows
Discount factor (14%)
Present value
Net present value
Project Y:
Initial investment
Single cash inflows
Total cash flows
Discount factor (14%)
Present value
Net present value