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Top Notch Limited has $750,000 to invest and is trying to decide between two alternative uses of the funds. The alternatives are as follows: The
Top Notch Limited has $750,000 to invest and is trying to decide between two alternative uses of the funds. The alternatives are as follows: The working capital needed for Project B will be released for investment elsewhere at the end of seven years. Top Notch uses a 20% discount rate. Required: a. Calculate net present value for each project. (Hint: Use Microsoft Excel to calculate the discount factor(s).) (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Do not leave any empty spaces; input a 0 wherever it is required.) a. Calculate net present value for each project. (Hint: Use Microsoft Excel to calculate the discount factor(s).) (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Do not leave any empty spaces; input a 0 wherever it is required.) b. Which investment alternative (if either) would you recommend that the company accept? Project B Project A
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