Problem $13-14($Algo$)$ Risk$-$adjusted discount rate $[$LO$13-3]$

Dixie Dynamite Company is evaluating two methods of blowing up old buildings for commercial purposes over the next five Method one $($implosion$)$ is relatively low in risk for this business and will carry a $11$ percent discount rate. Method two $($explosi expensive to perform but more dangerous and will call for a higher discount rate of $16$ percent. Either method will require an capital outlay of $$96,000.$ The inflows from projected business over the next five years are shown next.

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References

$\backslash$table$[[$Years$,$Method $1,$Method $2],[1,$$$33,600,$$$25,400$