Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these projects (Ignore income taxes.): Cost of equipment needed now Working capital investment needed now Annual net operating cash inflows Salvage value of equipment in 6 years The net present value of Project B is closest to: Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using the tables provided. Both projects have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Lambert's discount rate is 14%. Show Transcribed Text Project A Project B $120,000 $70,000 $50,000 $45,000 Multiple Choice $77,805 $127,805 $55,005 $105,005 $ 50,000 $ 15,000
Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these projects (Ignore income taxes.): Cost of equipment needed now Working capital investment needed now Annual net operating cash inflows Salvage value of equipment in 6 years The net present value of Project B is closest to: Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using the tables provided. Both projects have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Lambert's discount rate is 14%. Show Transcribed Text Project A Project B $120,000 $70,000 $50,000 $45,000 Multiple Choice $77,805 $127,805 $55,005 $105,005 $ 50,000 $ 15,000
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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Transcribed Image Text:Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these projects
(Ignore income taxes.):
Cost of equipment needed now
Working capital investment needed
now
Annual net operating cash inflows
Salvage value of equipment in 6
years.
Show Transcribed Text
Project A Project B
$120,000
$70,000
$50,000
$45,000
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
Both projects have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere.
Lambert's discount rate is 14%.
The net present value of Project B is closest to:
Multiple Choice
$77,805
$127,805
$55,005
$105,005
$ 50,000
$ 15,000
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