Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Annual cash inflows that will arise from two competing investment projects are g

ID: 2411194 • Letter: A

Question

Annual cash inflows that will arise from two competing investment projects are given below:

    

The discount rate is 9%.

Compute the present value of the cash inflows for each investment. Each investment opportunity will require the same initial investment. (Use Microsoft Excel to calculate present values. Do not round intermediate calculations.)

Annual cash inflows that will arise from two competing investment projects are given below:

Investment A: Item Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Cash Inflow Year 4 Cash Inflow NPV of Cash Inflows RATE NPER PMT PV Investment B: Item Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Cash Inflow Year 4 Cash Inflow NPV of Cash Inflows RATE NPER PMT FV PV

Explanation / Answer

Investment - A

Item

Cash Flow

Present Value Factor

Present Value of cash flow

Year 1 cash Inflow

5,000

0.917431

4,587.16

Year 2 cash Inflow

6,000

0.841680

5,050.08

Year 3 cash Inflow

7,000

0.772183

5,405.28

Year 4 cash Inflow

8,000

0.708425

5,667.40

Total Present Value of cash flows

$20,709.92

Investment - B

Item

Cash Flow

Present Value Factor

Present Value of cash flow

Year 1 cash Inflow

8,000

0.917431

7,339.45

Year 2 cash Inflow

7,000

0.841680

5,891.76

Year 3 cash Inflow

6,000

0.772183

4,633.10

Year 4 cash Inflow

5,000

0.708425

3,542.13

Total Present Value of cash flows

$ 21,406.44

Item

Cash Flow

Present Value Factor

Present Value of cash flow

Year 1 cash Inflow

5,000

0.917431

4,587.16

Year 2 cash Inflow

6,000

0.841680

5,050.08

Year 3 cash Inflow

7,000

0.772183

5,405.28

Year 4 cash Inflow

8,000

0.708425

5,667.40

Total Present Value of cash flows

$20,709.92

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote