1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be 12% and the projects have the following investments and cash flow. Initial Investment Cash Flow 1 2 3 4 Project A 100,000.00 40,000.00 50,000.00 20,000.00 20,000.00 1. What is the net present value of Project A? B. P 13,725.40 A. P 9,637.75 2. What is the net present value of Project B? C. P 20,216.84 Project B 90,000.00 67,500.00 78,750.00 20,000.00 20,000.00 D. P 56,800.00
1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be 12% and the projects have the following investments and cash flow. Initial Investment Cash Flow 1 2 3 4 Project A 100,000.00 40,000.00 50,000.00 20,000.00 20,000.00 1. What is the net present value of Project A? B. P 13,725.40 A. P 9,637.75 2. What is the net present value of Project B? C. P 20,216.84 Project B 90,000.00 67,500.00 78,750.00 20,000.00 20,000.00 D. P 56,800.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be
12% and the projects have the following investments and cash flow.
Initial Investment
Cash Flow
1
2
3
4
Project A
100,000.00
40,000.00
50,000.00
20,000.00
20,000.00
1. What is the net present value of Project A?
B. P 13,725.40
A. P 9,637.75
2. What is the net present value of Project B?
A. P 18,365.24
B. P 32,751.19
C. P 20,216.84
C. P 59,992.84
Project B
90,000.00
67,500.00
78,750.00
20,000.00
20,000.00
D. P 56,800.00
D. P 86,250.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd9165c58-b2a7-478e-a000-4ba7a5aa4dd6%2F0a1bf6ec-6510-4736-9c86-aa02e5e55511%2Fjso8ur8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be
12% and the projects have the following investments and cash flow.
Initial Investment
Cash Flow
1
2
3
4
Project A
100,000.00
40,000.00
50,000.00
20,000.00
20,000.00
1. What is the net present value of Project A?
B. P 13,725.40
A. P 9,637.75
2. What is the net present value of Project B?
A. P 18,365.24
B. P 32,751.19
C. P 20,216.84
C. P 59,992.84
Project B
90,000.00
67,500.00
78,750.00
20,000.00
20,000.00
D. P 56,800.00
D. P 86,250.00
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