Question 3 20 pts HGZ company is considering investing in Project Zeta or Projec

Question

Question 3 20 pts HGZ company is considering investing in Project Zeta or Project Omega. Project Zeta generates the following cash flows: year "zero" = 402 dollars (outflow); year 1-108 dollars (inflow); year 2-328 dollars (inflow); year 3 311 dollars (inflow); year 4 132 dollars (inflow). Project Omega generates the following cash flows: year "zero" 230 dollars (outflow); year 1 120 dollars (inflow); year 2 100 dollars (inflow); year 3-200 dollars (inflow); year 4-120 dollars (inflow). The MARR is 10%. Using the Future Value Method, calculate the Net Future Value of the BEST project. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas) Question 4 20 pts XTR company is considering investing in Project Zeta or Project Omega. Project Zeta generates the following cash flows: year "zero" 341 dollars (outflow); year 1 111 dollars (inflow); year 2 333 dollars (inflow); year 3 383 dollars (inflow); year 4 122 dollars (inflow). Project Omega generates the following cash flows: year "zero" 230 dollars (outflow); year 1 120 dollars (inflow); year 2 100 dollars (inflow); year 3-200 dollars (inflow); year 4-120 dollars (inflow). The MARR is 10 %. Using the Annual Worth Method, calculate the annual worth of the BEST project. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)

Explanation / Answer

Solution 3 interest rate 10.00% Year Project Zeta Project Omega FV fatctor Futre Value Project Zeta Futre Value Project Omega 0          (402)          (230) 1.464          (589)          (337) 1            108            120 1.331            144            160 2            328            100 1.210            397            121 3            311            200 1.100            342            220 4            132            120 1.000            132            120 Total of future value            426            284 So the best project is Zeta with future value as 426 Solution 4 interest rate 10.00% Year Project Zeta Project Omega PV fatctor Present Value Project Zeta Present Value Project Omega 0          (341)          (230) 1.000          (341)          (230) 1            111            120 0.909            101            109 2            333            100 0.826            275               83 3            383            200 0.751            288            150 4            122            120 0.683               83               82 Total Present Value (PV)            406            194 Annual worth = PV*((i*(1+i)^n)/(((1+i)^n)-1)) Annual worth ZETA =406*((10%*(1+10%)^4)/(((1+10%)^4)-1)) Annual worth ZETA 128.08 Annual worth Omega =194*((10%*(1+10%)^4)/(((1+10%)^4)-1)) Annual worth Omega 61.20

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.