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Part 3: Your firm needs to invest in internal transportation equipment and is considering two options. are analyzing two investments in plant assets. Both

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Part 3: Your firm needs to invest in internal transportation equipment and is considering two options. are analyzing two investments in plant assets. Both options are considered average risk to the firm. Therefore the firm will use its WACC of 10.8% as the hurdle rate in the investment analysis. a. Complete this schedule as support for computing the net present value of the two investment options. (4 points) Option A Option B Periods Cash Flow Present Value Cash Flow Present Value 0 $ (400,000) $ (500,000) 1 200,000 200,000 2 180,000 180,000 3 180,000 180,000 4 75,000 120,000 5 6 100,000 80,000 Problem Set b. Page 6 of 13 Compute the net present value (NPV) of the two investment options. (4 points) Option A Option B Net Present Value (NPV) Supporting Calculations Required:

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