Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 2,000 $ 5,000 2 3,000 4,000 3 4,000 3,000 4 5,000 2,000 $ 14,000 $ 14,000 The discount rate is 12%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 2,000 $ 5,000 2 3,000 4,000 3 4,000 3,000 4 5,000 2,000 $ 14,000 $ 14,000 The discount rate is 12%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Annual
| Year | Investment A | Investment B |
|---|---|---|
| 1 | $ 2,000 | $ 5,000 |
| 2 | 3,000 | 4,000 |
| 3 | 4,000 | 3,000 |
| 4 | 5,000 | 2,000 |
| $ 14,000 | $ 14,000 |
The discount rate is 12%.
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.
Required:
Compute the present value of the cash inflows for each investment.
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