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 9Explanation / 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
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