Q13.2 Consider the following cash flow data for two competing investment project
ID: 2743517 • Letter: Q
Question
Q13.2
Consider the following cash flow data for two competing investment projects. (Please show work)(Use excel if possible)
n Project A Project B
0 -$800 -$2,635
1 -$1,500 -$565
2 -$435 $820
3 $775 $820
4 $775 $1,080
5 $1,275 $1,080
6 $1,275 $1,500
7 $975 $980
8 $675 $580
9 $375 $380
10 $660 $840
At MARR = 12% using incremental PW analysis, which alternative in would you consider the better choice?
Choose A
Choose B
Either A or B
Neither A nor B
a.Choose A
b.Choose B
c.Either A or B
d.Neither A nor B
Explanation / Answer
Present Worth Analsis:
Chooze Project B , because it incremental present worth of $253($1,242-$989) from Project A to Project B
Year Cash flow-A Cash flow-B Pv@12% NPV-A NPV-B 0 -800 -2635 1.0000 -800.00 -2,635.00 1 -1500 -565 0.8929 -1,339.29 -504.46 2 -435 820 0.7972 -346.78 653.70 3 775 820 0.7118 551.63 583.66 4 775 1080 0.6355 492.53 686.36 5 1275 1080 0.5674 723.47 612.82 6 1275 1500 0.5066 645.95 759.95 7 975 980 0.4523 441.04 443.30 8 675 580 0.4039 272.62 234.25 9 375 380 0.3606 135.23 137.03 10 660 840 0.3220 212.50 270.46 989 1,242Related Questions
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