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:

Investment Options

Project X Project Y

Initial Investment $ $55,000$ $ $55,000$

Annual cash inflows $19,000$

Single cash inflow at the end of $10$ years $250,000$

Life of the project $10$ years $10$ years

Labeau$$s discount rate for both projects is $18\%.($Ignore 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.$)$

Which alternative would you recommend that the company accept?

multiple choice

Project X

Project Y