Question
You will use the following information to answer three questions. You have been asked to analyze two proposed capital investments. The information related to each
You will use the following information to answer three questions.
You have been asked to analyze two proposed capital investments. The information related to each project is listed below.
| Project A | Project B | |
| Initial Cost | $250,000 | $350,000 |
| Cash Flows | ||
| Year 1 | $70,000 | $50,000 |
| Year 2 | $70,000 | $80,000 |
| Year 3 | $70,000 | $92,000 |
| Year 4 | $70,000 | $96,000 |
| Year 5 | $70,000 | $103,000 |
| Salvage Value | $20,000 | $35,000 |
Which project would you recommend? Why?
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
