Sheridan Corporation is considering two investment opportunities with cash flows as described below:

Project J:

Cash investment now $40,000

Cash inflow at the end of 3 years $30,000

Cash inflow at the end of 7 years $50,000

Project K:

Cash investment now $40,000

Annual cash inflow for 5 years $15,000

Cash outflow at the end of 6 years $11,000

Additional cash inflow at the end of 7 years $15,000

Required (9 points): Compute the net present value of each project assuming Sheridan Corporation uses a 13% discount rate. Which investment would you recommend they accept? Why?

20. Sheridan Corporation is considering two investment opportunities with cash flows as described below: Project : Cash investment now Cash inflow at the end of 3 years Cash inflow at the end of 7 years $40,000 $30,000 $50,000 Project K: Cash investment now Annual cash inflow for 5 years Cash outflow at the end of 6 years Additional cash inflow at the end of 7 years $40,000 $15.000 $11,000 $15,000 Required (9 points): Compute the net present value of each project assuming Sheridan Corporation uses a 13% discount rate. Which investment would you recommend they accept? Why