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Labeau Products, Ltd., of Perth, Australia, has $23,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:
| Labeau Products, Ltd., of Perth, Australia, has $23,000 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 | $ | 23,000 | $ | 23,000 |
| Annual cash inflows | $ | 7,000 | ||
| Single cash inflow at the end of 6 years | $ | 43,000 | ||
| Life of the project | 6 years | 6 years | ||
| The company |
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