Can you answer question 3 and please show your work! Thanks For the Year Ending

Question

Can you answer question 3 and please show your work! Thanks

For the Year Ending December 31,2010 JH Distributors SJT R.F. Michinan Net sales Cost of sales 8,534,662 7,434,881 1,099,781 5,636,88410,534,729 3,256,774 2,380.110751.723 9,783,006 Gross profit Selling, general and administrative Others 201,477 47.551 249,028 598,112 528,948 98,418 627,366 1311.001 1.909,113 Total Operating Expenses Operating profit (loss) 72,415 470.997 502.695 = 3,407 469,008 Other income (expense) Earnings before interest and tax Interest Expense Income (loss) before tax Income taxes (benefit) 3,589 467,408 3,287 499,408 469,008 175,878 293,130 467,408 175,278 292,130 499,408 187.278 312,130 Net income (loss)

Explanation / Answer

Calculation of NPV-   (in$)

Project 1.-

P.V of inflow=(31000*.909(PVIF))+(31000*.826(PVIF))+(31000*.751(PVIF))+(31000*.683(PVIF))

=98248

NPV=

98248-100000=-1752

Project 2-

P.V of inflow =30000*3.169(PVAF)

=95070

N.P.v of project 2=95070-95000

=70

Project-3

P.V of project =30000*3.038(PVAF)

=91140

N.P.V of project 3=91140-93000

=-1860

on the basis of above calculations, it can be concluded that project 2 is best because it has positive NPV.So, Money should be invested in project 2.

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