Labeau Products, Ltd., of Perth, Australia, has $32,000 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	$	32,000	$	32,000
Annual cash inflows	$	9,000
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 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables.

Required:

1. Compute the net present value of Project X.

2. Compute the net present value of Project Y.

3. Which project would you recommend the company accept?

Compute the net present value of Project X. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.)

Net present value

Compute the net present value of Project Y. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.)

Net present value

Which project would you recommend the company accept?

	Project X Project Y