The Following Information Relates to Three Mutually Exclusive Projects REQUIRED:
Compute the Net Present Value of Each Project at \text

question 47

Essay

The following information relates to three mutually exclusive projects.
$\begin{array}{lrrr}& \text { Project } A & \text { Project B } & \text { Project C } \\\text { Initial cash outlay } & \$ 40,000 & \$ 40,000 & \$ 40,000\\\text { Net cash inflows: }\\\text { Year }1 & 3,000 & 16,000 & 12,000 \\2 & 7,000 & 13,000 & 12,000 \\3 & 11,000 & 10,000 & 12,000 \\4 & 15,000 & 7,000 & 12,000 \\5 & 19,000 & 4,000 & 12,000 \\\text {salvage value Year 5 } & 8,000 & \mathrm{Nil} & 2,000\end{array}$
REQUIRED:
Compute the net present value of each project at a discount rate of 10%.

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Definitions:

Financing

The act of supplying capital for company operations, acquisitions, or investment activities.

Collections from Customers

The process or total amount of money received from customers in payment for sales of goods or services.

Cash Collected

The total amount of cash received by a company during a specific period.

Sales Collection

The process of receiving payment from customers for goods or services sold, improving cash flow and liquidity.