Chapter 13 6 Saved Help Save& Exit Submit Labeau Products, Ltd., of Perth, Austr

Question

Chapter 13 6 Saved Help Save& Exit Submit Labeau Products, Ltd., of Perth, Australia, has $35,000 to invest. The company is trying to decide between two alternative uses for the funds as follows Project Project Investnent reqaired Annual eash intlows Single cash inflow at the end of & years Life of the projeet s 35,000 $35,000 $ 12,000 90,000 years years The company's discount rate is 18%. Click here to view Exhibit 13B. 1 and Exhibit 138.2, to determine the appropriate discount factoris) using tables Required: 1. Compute the net present value of Project X 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the net present value of Project x. (Round your final answer to the nearest whole dollar Required 2> MacBook Air

Explanation / Answer

1) Net Present value of project X = Present value of cash inflow-Present value of cash outflow

= (12000*3.498)-35000

Net present value of project X = 6976

2) Net present value of project Y = 90000*.370-35000 = -1700

3) Project X

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