Labeau Products, Ltd., of Perth, Australia, has $25,000 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	$	25,000	$	25,000
Annual cash inflows	$	8,000
Single cash inflow at the end of 6 years			$	60,000
Life of the project	6 years		6 years

The companys discount rate is 16%.

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

Years:	NOW	1	2	3	4	5	6
Project X:
Initial investment
Annual cash inflow
Discount factor (16%)
present value
Net present value?
Project Y:
Initial investment
single cash inflow
total cash flow
Discount factor (16%)
present Value
Net present Value

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.)

b.

Which alternative would you recommend that the company accept?

	Project X
	Project Y