EOY NCF(A) NCF(B) 0 -$30,000 -$42,000 1 $9,300 $12,625 2 $9,300 $12,625 3 $9,300 $12,625 $9,300 $12,625 $9,300 $12,625 4-

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
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Two mutually exclusive proposals, each with a life of 5 years, are under consideration. MARR is 12%. Each proposal has the following cash flow profile: Determine which (if either) alternative the decision maker should select using the external rate of return method.

EOY NCF(A) NCF(B)
0 -$30,000 -$42,000
1
$9,300 $12,625
2
$9,300 $12,625
3
$9,300 $12,625
$9,300 $12,625
$9,300 $12,625
4-
Transcribed Image Text:EOY NCF(A) NCF(B) 0 -$30,000 -$42,000 1 $9,300 $12,625 2 $9,300 $12,625 3 $9,300 $12,625 $9,300 $12,625 $9,300 $12,625 4-
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