Lithium inc is considering two mutually exclusive projects, A and B. Project A c

Question

Lithium inc is considering two mutually exclusive projects, A and B. Project A cost $95,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project B cost $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. The firms required rate of return for these projects is 10%. The bet present value for project A is A) $12,358 B) 16,947 C) 19,458 D) 26,074
Lithium inc is considering two mutually exclusive projects, A and B. Project A cost $95,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project B cost $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. The firms required rate of return for these projects is 10%. The bet present value for project A is A) $12,358 B) 16,947 C) 19,458 D) 26,074
A) $12,358 B) 16,947 C) 19,458 D) 26,074

Explanation / Answer

The Best PV of Project A = -95000 + 65000/1.1+75000/1.21 = 26074

Ans is Option D) $ 26074

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

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