Labeau Products, Ltd., of Perth, Australia, has $26,000 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 $ 26,000 $ 26,000 Annual cash inflows $ 8,000 Single cash inflow at the end of 6 years $ 50,000 Life of the project 6 years 6 years The companys discount rate is 12%. Click here to view Exhibit 11B-1 and Exhibit 11B-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. Use the appropriate table to determine the discount factor(s).)

Exercise 11-11 Comparison of Projects Using Net Present Value [L011-2] Labeau Products, Ltd., of Perth, Australia, has $26,000 to invest. The company is trying to decide between two altenative uses for the funds as follows: Invest in Invest in Project X Project Y $26,000 26,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project $ 8,000 $ 50,000 6 years6 years The company's discount rate is 12%. Click here to view Exhibit 11B-1 and Exhibit 11B-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. Use the appropriate table to determine the discount factor(s).) Now 4 Project X: Initial investment Annual cash inflows Total cash flows Discount factor (12%) Present value Net present value 0 S 0 S 0 S 0 S 0 S 0 S 0 0 0 Project Y: Initial investment Single cash inflows Total cash flows Discount factor (12%) Present value Net present value