Labeau Products, Ltd., of Perth, Australia, has $29,000 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	$	29,000			$	29,000
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 15%.

Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using tables.

Required:

a. Determine the net present values.

b. Which alternative would you recommend that the company accept?

	Project X
	Project Y