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Net Present Value Analysis Cooper Company must evaluate two capital expenditure proposals. Coopers hurdle rate is 10%. Data for the two proposals follow. Proposal X

Net Present Value Analysis Cooper Company must evaluate two capital expenditure proposals. Coopers hurdle rate is 10%. Data for the two proposals follow.

Proposal X Proposal Y
Required investment $120,000 $120,000
Annual after-tax cash inflows 24,000
After-tax cash inflows at the end of years 3, 6, 9, and 12 72,000
Life of project 12 years 12 years

Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value.

Proposal X Proposal Y
Net present value
Initial outflows Answer

Answer

PV of future cash flows Answer

Answer

Net present value Answer

Answer

Which proposal is more attractive? AnswerProposal XProposal Y

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