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Labeau Products Ltd., of Perth, Australia, has $55,000 to invest. The company is trying to decide between two alternative uses for the funds, as follows:
Labeau Products Ltd., of Perth, Australia, has $55,000 to invest. The company is trying to decide between two alternative uses for the funds, as follows: Initial Investment Annual cash inflows Single cash inflow at the end of 10 years Life of the project Investment Options Project X Project $ 55,000 $ 55,000 19,000 250,000 10 years 19 years Labeau's discount rate for both projects is 18% (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.) A Net Present Value Project X Project Y Required: Determine the net present value. (Negative amounts should be indicated with a minus sign. Round discount factor(s) to 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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