The Following Information Relates to Three Mutually Exclusive Projects REQUIRED $\text { Compute the net present value of each project at a discount rate of } 10 \% \text {. }$

question 63

Essay

The following information relates to three mutually exclusive projects. $\begin{array}{rrrr}& \text { Project } A & \text { Project } B & \text { Project C } \\\text { Initial cash outlay } & \$ 40,000 & \$ 40,000 & \$ 40,000\\\text { Net cash inflows: }\\year1 & 3,000 & 16,000 & 12,000 \\2 & 7,000 & 13,000 & 12,000 \\3 & 11,000 & 10,000 & 12,000 \\4 & 15,000 & 7,000 & 12,000 \\5 & 19,000 & 4,000 & 12,000\\\text { Salvage value Year } 5&8,000 & \text { Nil } & 2,000\end{array}$ REQUIRED:
$\text { Compute the net present value of each project at a discount rate of } 10 \% \text {. }$

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Definitions:

Antipollution Policy

Strategies and regulations implemented by governments or organizations to reduce and control the emission of pollutants.

External Costs

Costs of an economic activity that are not borne by the parties involved in the transaction but are instead imposed on third parties or the society at large.

Peak Driving

Peak driving refers to periods of high demand for gasoline, often coinciding with certain times of the year like summer holidays, resulting in higher gasoline prices due to increased consumption.