Project a Requires an Original Investment of $50,000

question 71

Short Answer

Project A requires an original investment of $50,000. The project will yield cash flows of $15,000 per year for 7 years. Project B has a calculated net present value of $13,500 over a 4-year life. Project A could be sold at the end of 4 years for $25,000.
(a) Using the table below, determine the net present value of Project A over a 4-year life with salvage value assuming a minimum rate of return of 12%.
(b) Which project provides the greatest net present value?
Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.

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Definitions:

Positively or Negatively Charged

Describes an object or entity that has an electric charge, positive if it has more protons than electrons, and negative if it has more electrons than protons.

Released by Electrolytes

Pertains to substances that dissociate into ions in solution, thereby becoming capable of conducting electricity; the process of releasing ions or charged particles.

Charged Particles

Particles with either a positive or negative electrical charge, which include ions and electrons.

Midsagittal Plane

An anatomical plane that divides the body into equal right and left halves.