Exercise 11-6 Comparison of Projects Using Net Present Value [LO1] Sharp Company

Question

Exercise 11-6 Comparison of Projects Using Net Present Value [LO1]

Sharp Company has $31,000 to invest. The company is trying to decide between two alternative uses of the funds as follows:

Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables.

Determine the net present value. (Negative amounts should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answers to the nearest whole dollar.)

Sharp Company has $31,000 to invest. The company is trying to decide between two alternative uses of the funds as follows:

Explanation / Answer

Please find the answer as follows:

Project A

NPV = -31000 + 5000*7.139 = 4695

Project B

NPV = -31000 + 46000*.429 = -11260

Thanks

Word of advice: Next time please put the tables up. I currently am taking this class so i know which tables to use. Thanks. Please rate and comment.

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