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Writing assignments (Due Saturday as a Word or Excel file) Show ALL Work
You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 7 percent? What if the discount rate is 10 percent?
At 7 % the NPV for project A is cash inflows – cash outflows, ($ 360,000* 0.8163) - $275,0000= $18,868
Project B, NPV= $113,600*0.0.9346+ ($81,900*0.8734) + ($47,000*0.8163) - $202,000= $14,068
At 10 % NPV project A= ($360,000*0.7513) - $ 360,000= ($4,532)
NPV Project B = ($116,600*0.9091) + ($81,900*0.8264) + ($47,000*0.7513) - $202,000= $4,267
* At 7% choose Project A with higher NPV
* At 10% choose project B with higher NPV
1 Radiology Associates is considering an investment which will cost $259,000. The
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