1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be 12% and the projects have the following investments and cash flow. Initial Investment Cash Flow 1 2 3 4 Project A 100,000.00 40,000.00 50,000.00 20,000.00 20,000.00 What is the net present value of Project A? A. P 9,637.75 B. P 13,725.40 What is the net present value of Project B? B. P 32,751.19 A. P 18,365.24 C. P 20,216.84 C. P 59,992.84 Project B 90,000.00 67,500.00 78,750.00 20,000.00 20,000.00 D. € 56,800.00 D. P 86,250.00
1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be 12% and the projects have the following investments and cash flow. Initial Investment Cash Flow 1 2 3 4 Project A 100,000.00 40,000.00 50,000.00 20,000.00 20,000.00 What is the net present value of Project A? A. P 9,637.75 B. P 13,725.40 What is the net present value of Project B? B. P 32,751.19 A. P 18,365.24 C. P 20,216.84 C. P 59,992.84 Project B 90,000.00 67,500.00 78,750.00 20,000.00 20,000.00 D. € 56,800.00 D. P 86,250.00
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
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![1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be
12% and the projects have the following investments and cash flow.
Initial Investment
Cash Flow
1
12
Project A
100,000.00
40,000.00
50,000.00
20,000.00
20,000.00
2
3
4
What is the net present value of Project A?
A. P 9,637.75
B. P 13,725.40
What is the net present value of Project B?
B. P 32,751.19
A. P 18,365.24
C. P 20,216.84
C. P 59,992.84
Project B
90,000.00
67,500.00
78,750.00
20,000.00
20,000.00
D. P 56,800.00
D. P 86,250.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fea23de47-0192-467b-83b2-279f9aba3ab6%2F514f6e69-2392-4053-ad34-3eeb3523f922%2Faw57apc_processed.png&w=3840&q=75)
Transcribed Image Text:1. A company is evaluating two projects, A and B. The company's cost of capital has been determined to be
12% and the projects have the following investments and cash flow.
Initial Investment
Cash Flow
1
12
Project A
100,000.00
40,000.00
50,000.00
20,000.00
20,000.00
2
3
4
What is the net present value of Project A?
A. P 9,637.75
B. P 13,725.40
What is the net present value of Project B?
B. P 32,751.19
A. P 18,365.24
C. P 20,216.84
C. P 59,992.84
Project B
90,000.00
67,500.00
78,750.00
20,000.00
20,000.00
D. P 56,800.00
D. P 86,250.00
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