Assignment Week – 7 - Annual Cash inflow 1...

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Assignment Week – 7 Exercise 14-10 on page 658 Item Year Amt of cash inflow 14% factor Present value cash flow Project A Cost of Equipment Now 100,000 1 -100,000 Annual Cash Inflow 1 - 6 21,000 3.889 81,669 Salvage Value equipment 6 8,000 0.456 3,648 Net Present Value -14,683 Project B Working capital Investment Now 100,000 1 -100,000
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Unformatted text preview: Annual Cash inflow 1 - 6 16,000 3.889 62,224 Working Capital released 6 100,000 0.456 45,600 Net present Value 7,824 The 100,000 should be invested in Project B rather than Project A, since Project B has a positive Net Present Value and Project A has negative Net Present Value...
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This note was uploaded on 09/08/2011 for the course ACCOUNTING AC505 taught by Professor Terrymulder during the Spring '09 term at Keller Graduate School of Management.

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