Question
PQR Enterprises is considering three alternative investment proposals: Cash Flows Year 0 Year 1 Year 2 Year 3 Year 4 Project A $(300,000) $90,000 $100,000
PQR Enterprises is considering three alternative investment proposals:
Cash Flows | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |
Project A | $(300,000) | $90,000 | $100,000 | $80,000 | $70,000 |
Project B | $(350,000) | $95,000 | $110,000 | $85,000 | $75,000 |
Project C | $(400,000) | $100,000 | $120,000 | $90,000 | $80,000 |
Requirements:
- Calculate the NPV for each project using a discount rate of 8%.
- Determine the PI for each project.
- Prepare a comparative balance sheet for the selected project.
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Accounting For Managers Interpreting Accounting Information For Decision Making
Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann
1st Canadian Edition
1118037960, 9781118037966
