Annual cash inflows from two competing investment projects are given below. Year 1 2 Investment A $ 2,000 Investment B $ 5,000 3,000 4,000 3 4,000 3,000 4 5,000 2,000 $ 14,000 $ 14,000 The discount rate is 10%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables Required: Compute the present value of the cash inflows for each investment. Present Value of Cash Flows Year Investment A Investment B 1 2 3 4 0
Annual cash inflows from two competing investment projects are given below. Year 1 2 Investment A $ 2,000 Investment B $ 5,000 3,000 4,000 3 4,000 3,000 4 5,000 2,000 $ 14,000 $ 14,000 The discount rate is 10%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables Required: Compute the present value of the cash inflows for each investment. Present Value of Cash Flows Year Investment A Investment B 1 2 3 4 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dineshbhai
Transcribed Image Text:Annual cash inflows from two competing investment projects are given below.
Year
1
2
Investment A
$ 2,000
Investment B
$ 5,000
3,000
4,000
3
4,000
3,000
4
5,000
2,000
$ 14,000
$ 14,000
The discount rate is 10%.
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables
Required:
Compute the present value of the cash inflows for each investment.
Present Value of Cash Flows
Year
Investment A
Investment B
1
2
3
4
0
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