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Shamrock Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $485 Co0, has an expected useful life of 12 years
Shamrock Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $485 Co0, has an expected useful life of 12 years and a salvage value of zero, and is expected to increase net annual cash flows by $75,000. Project B will cost $272,000, has an expected useful life of 12 years and a salvage value of zero, and is expected to increase net annual cash flows by $45,000. A discount rate of 9% is approptiate for both projects: Click here to view the factor table. Calculate the net present value and profitability indexof each project. (If the net present value is negative, use either a negative siga preceding the number e.8. 45 or parentheses e.g. (45). Round present value answers to 0 decimal places, c.g. 125 and proffability index answers to 2 decimal places, e. 15.52. For calculation purposes, use 5 decimal places as displaved in the. factor table pravided, e.8. 1,25124.) Which project should be accepted based on net gresent value
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