There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $31,500 $22,500 $5,500 $59,500 Beta Project 7,500 24,000 28,500 60,000 (Click here to see present value and future value tables) A. If the discount rate is 10%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places. Alpha Project $ Beta Project

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the
following cash flows:
First Year
Second Year Third Year
Total
Alpha Project
$31,500
$22,500
$5,500
$59,500
Beta Project
7,500
24,000
28,500
60,000
(Click here to see present value and future value tables)
A. If the discount rate is 10%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2
decimal places.
Alpha Project $
Beta Project $
B. Which project should be recommended.
Alpha v
Transcribed Image Text:There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $31,500 $22,500 $5,500 $59,500 Beta Project 7,500 24,000 28,500 60,000 (Click here to see present value and future value tables) A. If the discount rate is 10%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places. Alpha Project $ Beta Project $ B. Which project should be recommended. Alpha v
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