I am stuck on this question. I would appreciate help. 1) Zellars, Inc. is consid

Question

I am stuck on this question. I would appreciate help.

1) Zellars, Inc. is considering two mutually exclusive projects, A and B. Project A costs
$75,000 and is expected to generate $48,000 in year one and $45,000 in year two.
Project B costs $80,000 and is expected to generate $34,000 in year one, $37,000
in year two, $26,000 in year three, and $25,000 in year four. Zellars, Inc.’s required
rate of return for these projects is 10%. The net present value for Project A is:
a. $5,826
b. $6,347
c. $18,000
d. $9,458

Explanation / Answer

a. $5,826

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