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Labeau Products Ltd., of Perth, Australia, has $36,000 to invest. The company is trying to decide between two alternative uses for the funds, as follows:
Labeau Products Ltd., of Perth, Australia, has $36,000 to invest. The company is trying to decide between two alternative uses for the funds, as follows: Investment Options Project Project Initial Investment $ 36,000 5 36,000 Annual cash inflows Single cash inflow at the end of 10 years 155,000 Life of the project 10 years 10 years 9,500 Labeau's discount rate for both projects is 20%. (gnore income taxes) Click here to view Exhibit 10.1 and Exhibit 10-2. to determine the appropriate discount factor(s) using tables. Required: Determine the net present value. (Negative amounts should be indicated with a minus sign. Round discount factor(s) to 3 decimal places.) Net Present Value Project X Project Y Which alternative would you recommend that the company accept? O Project X O Project Y
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