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please answer asap Problem 13-16: NPV and selection between two options Western Dynamite Company is evaluating two new methods of blowing up buildings for commercial
please answer asap
Problem 13-16: NPV and selection between two options Western Dynamite Company is evaluating two new methods of blowing up buildings for commercial purposes over the next five years. Method 1 (implosion) is relatively low in risk for this business and will carry a 10 percent discount rate. Method 2 (explosion) is more dangerous and will require a higher discount rate of 14 percent. Either method will require an initial capital outlay of $97,000. The expected cash inflows from projected business over the next five years are given below. Years 1 2 3 4 5 Method 1 $33, 100 39,800 42,100 37,000 19,200 Method 2 $20,300 25,600 40,000 30,400 71,900 a. (6 pts.) Calculate NPV for Method 1 and Method 2. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Net present value $ Method i Method 2 $ b. (3 pts) Which method should be selected using net present value analysis? O Method 1 O Method 2 O Neither of theseStep by Step Solution
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