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 YearSecond YearThird YearTotalAlpha Project$32,500 $23,000 $5,500 $61,000Beta Project8,000 23,000 28,000 59,000(Click here to see present value and future value tables)https://openstax.org/books/principles-managerial-accounting/pages/time-value-of-moneyA. If the discount rate is 12%, 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...?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	$32,500	$23,000	$5,500	$61,000
Beta Project	8,000	23,000	28,000	59,000

(Click here to see present value and future value tables)

https://openstax.org/books/principles-managerial-accounting/pages/time-value-of-money

A. If the discount rate is 12%, 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...?

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