Refer to Present Value Tables The Company's Cost of Capital Is 12

question 55

Essay

Refer to Present Value Tables. A company is considering two modifications to its current manufacturing process. The after-tax cash flows associated with the two investments are: $\begin{array}{lrr}\text { Year } & \text { Project I } & \text { Project II } \\\hline 0 & \$(37,500) & \$(150,000) \\1 & -- & 91,075 \\2 & \$ 50,460 & 91,075\end{array}$ The company's cost of capital is 12%.
Required:
A. Calculate the net present value for each investment.
B. Calculate the internal rate of return for each investment.
C. Which project is better? Explain your reasoning.

---

Definitions:

Collective Self-Esteem

The aspect of an individual's self-esteem derived from their identification with, and perceived value of, their social groups.

Stereotype Threat

A psychological phenomenon where individuals perform worse on tasks due to the fear of confirming negative stereotypes about their social group.

Gender Identity

An individual's personal sense of their own gender, which may or may not align with the sex they were assigned at birth.

Actual Selves

Represents one's perception of the self as it is, contrasted with the ideal self or the self that one believes they should become.