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Help Save 3A Homework Annual cash inflows that will anise from two competing inv

ID: 2518956 • Letter: H

Question

Help Save 3A Homework Annual cash inflows that will anise from two competing investment projects are given below 2,000 $5,000 4,000 3,008 2,000 1 3,800 4,800 5,000 $14,080 $14,008 The discount rate is 12% Click here to view Extsbet 138-1 and Exhibut 138-2, to determine the appropniate discount factor's) using tables Required Compute the present value of the cash indiows for each investment. Each investment opportunity will require the same nvestment (Round discount fectoris) to 3 decimal places.) Next > 5 6 8 9

Explanation / Answer

Ans. Calculation Present value of Investmet ( value in $)

Year       Investment A      Investment B      PVF@12%       PV of Investment A    PV of Investment B

1    2000                  5000                 .893    1786    4465

2              3000                  4000                 .797                    2391                          3188

3              4000                  3000                 .712                    2848                          2136

4              5000                  2000                 .636                    3180                          1272

Total        14000 14000 10205    11061                                               

PV of Investment A is = $10205

PV of Investment B is = $11061

Comment: Investment B is providing better positive cash flow as compair of Investment A