Question
Project Theta initial investment: $50,000. Annual cash inflows: $12,000 for 6 years. Project Zeta initial investment: $45,000. Annual cash inflows: $11,000 for 7 years. (a)
- Project Theta initial investment: $50,000.
- Annual cash inflows: $12,000 for 6 years.
- Project Zeta initial investment: $45,000.
- Annual cash inflows: $11,000 for 7 years.
(a) Calculate the NPV using a discount rate of 9%. (b) Determine the profitability index for both projects. (c) State which project to accept if mutually exclusive. (d) Decision if the projects are independent.
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Cornerstones Of Managerial Accounting
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
4th Edition
978-0538473460, 0538473460
