Question
Zeta Constructions is considering two mutually exclusive projects. The initial investment and annual cash flows are as follows: Year Cash Flows (Project E) Cash Flows
Zeta Constructions is considering two mutually exclusive projects. The initial investment and annual cash flows are as follows:
Year | Cash Flows (Project E) | Cash Flows (Project F) |
0 | -150,000 | -150,000 |
1 | 40,000 | 50,000 |
2 | 50,000 | 50,000 |
3 | 60,000 | 50,000 |
4 | 60,000 | 60,000 |
a. Calculate the NPV for both projects using a discount rate of 7%. b. Recommend which project Zeta Constructions should undertake.
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Financial and managerial accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
1st edition
111800423X, 9781118233443, 1118016114, 9781118004234, 1118233441, 978-1118016114
