A Company Is Considering Two Alternative Investment Opportunities, Each of Which

question 58

Essay

A company is considering two alternative investment opportunities, each of which requires an initial cash outlay of $110,000. The expected net cash flows from the two projects follow:
$$\begin{array} { | l | r | r | } \hline & \text { Project A } & \text { Project Z } \\\hline \text { Year 1 } & \$ 30,000 & \$ 44,000 \\\hline \text { Year 2 } & 44,000 & 70,000 \\\hline \text { Year 3 } & 70,000 & 30,000 \\\hline \text { Totals } & \$ 144,000 & \$ 144,000 \\\hline\end{array}$$ Required:
(1) Based on a comparison of their net present values, and assuming the same discount rate greater than zero is required for both projects, which project is the better investment?
(2) Use the table values below to find the net present value of the cash flows associated with Project A, discounted at 12%:
Periods Present value of 1 at 12%
1………………. 0.8929
2………………. 0.7972
3………………. 0.7118

Comprehend the impact of economic policies on income distribution and poverty levels.

Grasp the concepts of occupational segregation and its economic consequences.

Relate economic theories to real-world examples of income distribution and discrimination.

Evaluate the role of government and public policy in addressing income inequality and discrimination.

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Definitions:

Expressive Role

A social role focused on emotional support, nurturing, and maintaining relationships within the family or community.

Family Systems Theorist

An expert in the field of family therapy who studies the family as a complex system of interconnected and interdependent individuals, each influencing and being influenced by the other.

Gender Inequality

The disparity in status, power, and opportunity between individuals based on gender.

Social Class

Describes a grouping of people in a society based on their economic, cultural, or occupational status.